Greece Bank Creditor Group Says Talks �Paused for Reflection�; S&P to Cut Some Euro Zone Countries on Friday; Euro Sinks to New Low for the Move

Less than a day ago ECB president Mario Draghi was bragging "Credit Crunch Averted" noting the Euro's first weekly gain in five-weeks. Unfortunately for Draghi, there was still one day left in the week.

Greece Bank Creditor Group Says Talks �Paused for Reflection�

Bloomberg reports Greece Bank Creditor Group Says Talks �Paused for Reflection�

Talks between Greece and its creditor banks were put on hold after negotiations in Athens failed to yield an agreement.

A proposal put forward by the steering committee representing financial firms has �not produced a constructive consolidated response by all parties,� the Institute of International Finance said in an e-mailed statement today. �Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach.�

The IIF�s Charles Dallara and Jean Lemierre had met for a second day in Athens with Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos, aiming for a deal in the euro area�s first large restructuring. The committee had offered a 50 percent nominal reduction of Greece�s sovereign bonds in private investors� hands and as much as 100 billion ($127 billion) of debt forgiveness, the IIF said.

Greece hasn�t yet decided whether to submit legislation that could force holders of the nation�s debt to take part in a bond swap, according to a government spokesman who said his earlier remarks on the matter were misinterpreted.

European Debt Downgrades

Reuters reports S&P to Cut Some Euro Zone Countries on Friday

Standard & Poor's is set to downgrade the credit ratings of several euro zone countries later on Friday, but not those of Germany and the Netherlands, a senior euro zone government source said.

Another source confirmed "several" countries would be hit.

French TV, citing a government source, said France's credit rating would be downgraded and another source said Slovakia, the euro zone's second poorest country currently rated A+ by S&P, would suffer the same fate.

Euro Sinks to New Low for the Move

On some combination of the above news, the Euro reversed strong gains, falling to a new low for the move, down to 1.2627 from a high of 1.2884. That is a very big intraday currency swing of 2.57 cents vs. the US dollar.

Euro 15 Minute Chart



Creditors "Paused for Reflection, so should Mario Draghi.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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