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International MarketsZen International (Rescue For Greece Crumbles)

Posted 23rd March 2010.

Sources close to analysts at Zen International believe that internal wrangling within the European Union will result in the complete failure of the recently announced rescue plan for Greece.

It is widely acknowledged that both France and Germany are reluctant to commit funds to Greeces rescue. Both nations are concerned about the prospect of setting a morally hazardous precedent which may encourage other similarly afflicted nations like Portugal, Spain and Italy to seek bailouts should their debt problems deteriorate.

The Zen International analysts also cited the fact that the Greek Prime Minister, George Papandreou, told the European Parliament that his country was losing patience with the inability of the EU to provide guarantees despite the countrys implementation of severe austerity measures which he believes demonstrate Greeces commitment to reducing its deficit.

The firm says that if Greece turns to the IMF for funds, it will almost certainly destroy the credibility of monetary union and could pave the way for a return to separate currencies.

Germany is particularly reticent towards the bailout plan since it believes that it would represent the first step towards fiscal union and the shared responsibility for total EU debt. Such an occurrence would leave German taxpayers partially liable for some 3 trillion of debts run up by the so-called Club Med EU members including Spain and Portugal.

Zen International analysts suggested that the propensity of the Greek Premier to lambast the activities of hedge funds and other speculators gave the impression that Greece was attempting to blame others for its predicament.