Greek cri­sis si­m­il­iar to Rus­sian woes in 1998

Kathimerini English - - Business & Finance -

The Greek cri­sis has all the el­e­ments that dogged Rus­sia dur­ing its 1998 de­fault, ac­cord­ing to Sergei Ula­tov, the res­i­dent World Bank econ­o­mist in Moscow. “The Greece ex­am­ple re­minds me very much of what was hap­pen­ing in Rus­sia in 1998, but on a much larger scale,” Ula­tov said in an in­ter­view dur­ing the Rus­sia and CIS Cap­i­tal Mar­kets Fo­rum or­ga­nized by Euromoney in Lon­don yes­ter­day. Greece is strug­gling to con­vince in­vestors it can keep its fi­nances in­tact as Euro­pean of­fi­cials scram­ble to put to­gether a sec­ond bailout pack­age for the debt-strapped nation. Greek Prime Min­is­ter Ge­orge Pa­pan­dreou ear­lier this week won a vote of con­fi­dence, bol­ster­ing his new gov­ern­ment’s chances of push­ing through aus­ter­ity mea­sures to se­cure fur­ther fi­nan­cial aid. Fail­ure to se­cure the aid would push Greece to the brink of de­fault, with the coun­try need­ing the funds to cover 6.6 bil­lion eu­ros ($9.3 bil­lion) of ma­tur­ing bonds in Au­gust. Euro­pean fi­nance min­is­ters said ear­lier this week they would hold off on ap­prov­ing a 12-bil­lion-euro pay­ment to the coun­try promised for July un­til pas­sage of the plans to cut the bud­get deficit and sell state as­sets. Rus­sia de­faulted on bonds in 1998, when fail­ure to re­pay $40 bil­lion worth of lo­cal-cur­rency debt caused the ru­ble to be de­val­ued by 70 per­cent in two weeks and the econ­omy to con­tract by 5.3 per­cent that year. Ula­tov, like some of the other par­tic­i­pants of the fo­rum, said he ex­pects a Greek de­fault. (Bloomberg) 30. It warned of a tough first half to the 2011-12 year be­cause of strong com­par­a­tives a year ago when TV sales surged ahead of the soc­cer World Cup and the iPad was launched. (Reuters)

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