Greece May Seek Aid From IMF

The euro continued its fall Friday as investors and traders speculated whether Greece will obtain financial aid from other EU nations. Greece’s debt problems have pressured the euro since 2009 and disagreements about how to aid the ailing nation have caused political rifts in the euro zone.  The Athens government has indicated it may seek aid from the IMF and no concrete decision about how to aid Greece has been forthcoming from recent EU meetings. Most expect Greece to be high on the agenda of the upcoming EU summit next week. Michael Woolfolk of BNY Mellon in New York stated, “The tensions surrounding Greece are escalating. This whole IMF situation has become a game of brinkmanship and the whole uncertainty is undermining the euro.” European Central Bank President Jean-Claude Trichet and other EU officials have nixed IMF participation but the administration of Germany’s Chancellor Angela Merkel believes that the IMF should have a role in helping Greece. Greek Prime Minister George Papandreou said his country may turn to the IMF for aid if EU leaders fail to set up a lending mechanism at next week’s EU summit. Greece has to raise 10 billion Euros ($13.6 billion USD)  to refinance government bonds by April 20th and May 19th.Nobel Prize winning economist Robert Mundell said that the IMF should be a “lender of last resort” for Euro Zone nations.

European Commission President Calls For EU Aid For Greece

European Commission President Jose Manuel Barroso urged EU nations to agree to a standby aid mechanism to aid Greece as soon as possible. Barroso said Euro Zone nations should make coordinated bilateral loans to Greece and also said such loans would not violate the EU’s rules against bailouts. Barroso stated, “The European Commission is ready to make a proposal for an instrument for coordinated assistance for Greece. Such an instrument will be constituted by a system of coordinated bilateral loans and will be compatible with the no bailout clause and with strict conditionality. I urge all member states to agree as soon as possible on this instrument.”

BOE Says UK May Return to Recession

The US dollar and the yen gained on most major counterparts as the Dow Jones Industrial Average fell paring demand for risky assets. The pound was hammered in currency markets after the Bank of England said the UK may return to recession. Singapore-based Rogers Holdings Jim Rogers had this to say about the pound, “Things are pretty bad for sterling for the long, long, long term.  I cannot imagine buying sterling back unless it gets really cheap.”