Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with Bank of New Zealand, including news European monetary authorities met over the weekend and agreed a stop gap loan of 12 billion euros to support Greece. See more here at BBC.
But Greek Prime Minister George Papandreou has pleaded for a new bailout of 110 billion euros to support Greece over the next couple of years. See more here at The Guardian.
The talks to solve the Greek crisis and stop it spreading to other parts of Europe exposed a rift between France and Germany.
The French want another bailout by Northern European taxpayers, while the Germans are tried of such bailouts and want private debt holders to share some of the pain of a restructure. Meanwhile, the European Central Bank has warned that a restructure could trigger a formal default and financial market chaos.
Essentially, Europe is choosing to kick the can down the road of unsustainable debt in Southern Europe. See more here in my commentary on what the Greek crisis means for NZ.
Banks are beginning to realise the unsustainability of the debt loads and the inevitability of restructures that trigger losses. Some British banks have stopped lending to European banks, fearing the fallout from the contagion from a "Lehman-style" financial crisis in Europe.
This is forcing the European Central Bank to lend to these European banks, effectively shifting private debt to the public balance sheets. It raises the uncomfortable prospect that any Greek default could also wipe out the European Central Bank. See more here at The Telegraph.
Elsewhere, TVNZ is reporting the government will announce which parts of Christchurch will be abandoned and which will be rebuilt as early as Wednesday.
Meanwhile, there were signs that farmers have started spending again at the Field Days, which have just finished. However, many farmers are cautious and choosing to use their higher payouts to pay down debt first. See more here at NZHerald.
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