Greece Default Bets Mount
 
                         Investors  increase bets that Greece, Ireland and Portugal may restructure their  debts as they become more discriminating about European  creditworthiness, according to Bloomberg.
The average annual cost of protecting of Greek, Irish and Portuguese  bonds in the credit-default swaps market for five years exceeded the  average of Spanish and Italian contracts by a record $496,000 this  week. 
That’s up from $384,000 on Feb. 2 and $77,000 a year ago. Swaps on  Greece signal a 60 percent probability of default in five years, while  Spain and Italy survive the euro region’s deficit crisis.  
Following Greece’s downgrade by Moody’s earlier this week, the division  between peripheral nations widened and fueled speculation that the  European Union will fail to agree on a comprehensive package to end the  crisis, said Bloomberg.
Traders are betting Spain will avert an EU bailout as budget cuts and growth help repair its balance sheet.
Although Moody’s cut Spain’s credit rating on Thursday, the country’s  growth trajectory “looks more reassuring than that of Greece and  Portugal”, according to Moody’s analysts.
“We think that Portugal is likely to double-dip, while growth in Greece should remain in negative territory”, they added.
Investors note that Greece will inflict losses of about 50% on investors  and extend bond maturities by 5-10 years in a series of moves to reduce  its debt, according to Bloomberg.
(capital.gr)