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Justin Kuepper

Greece Bailout Likely to Happen at a Cost

By November 24, 2012

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Greek bonds rallied higher last week on speculation that aid will keep on flowing to the country, even after finance ministers failed twice to reach a deal in November. 10-year yields are now at 16.3%, which is the lowest since the country's debt was restructured earlier this year.

Unfortunately, Greece is facing its sixth year of recession in 2013, with the IMF insisting that the government cut its debt to 120% of GDP in order to be sustainable. But to unlock the next tranche of aid, interest rates charged by creditors at the sides will need to be reduced.

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