Dollar strengthens as investors eye Greece, Spain

NEW YORK - investor worries about the economic situation in Europe, particularly the Greece and the Spain, has propelled the higher the dollar Friday.

The euro slipped to $1.4201 in late trading in New York Friday of $1.4311 Thursday.

Credit ratings agency that Fitch cut ratings of long-term credit to Greece more in undesirable situation, saying that indebted countries faces challenges change its economy and the Government to reduce the debt.

Investors remain worried that the Greece will have to stretch its debt or pay less than what they are owed creditors. Europe, particularly those of the Greece banks hold lots of Greek bonds, and a restructuring can hurt them.

During this time, Spain organizes regional elections this weekend. Investors are afraid that new politicians should take up its duties will say that the country is even more deeply in debt that the Government had expected, said analyst for Brown Brothers Harriman Marc Chandler. This raises the possibility that Spain should attempt a rescue, following the path of the Greece, the Ireland and Portugal.

The euro has increased a steep 10 percent this year, reaching its highest point since December 2009 almost $1.49 in late April because investors expect the European Central Bank to keep raising interest rates. The Federal Reserve would keep rates near zero for a long time, perhaps until the end of next year. Higher rates can generate great returns on an investment, so that they tend to support the currency.

But a renewed focus on the problems in Europe this month has strengthened the dollar, although economists believe economic growth is perhaps not as strong as hoped to the United States this summer.

In other trade Friday, the pound sterling fimbriated up to $1.6276 to $1.6214, then only the dollar edged lower 81.57 Japanese yen of yen 81.63. The motto of the United States is passed to 97.23 cents Canadian Canadian cents 96.93, but went from Swiss franc 0.8815 to Swiss franc 0.8771.

Hammer rating of Greece in chaos-EU agencies

Athens/Brussels- Greece Monday after eurozone policymakers senior martelé credit rating agencies acknowledged that Athens will need a second rescue soon plan to avoid a disorderly obligations of debt consolidation.

Officials, said the European Union was also seeking to lower interest rates on loans of Ireland rescue in the weeks and consider easier terms of rescue for the Greece as the common currency area more deeply floundered in the crisis.

But the rating agency Standard & Poor offers much more radical measures were to be of 327 billion for sustainable Greece euros ($470 billion) debt mountain, saying Athens can do to reduce the nominal value of its obligations up to 70%which implies large losses for investors.

S & P downgraded the Greece credit rating deeper into junk territory-B, just one notch above Pakistan, striking Greek bank stocks investors seeking safety in German bonds. The euro slipped to its lowest level in three weeks against the dollar.

Investor Service of Moody threatened to downgrade the Greece by several cuts, placing the Athens B1 sovereign rating on review because of concerns increased it might seek to impose losses on private bond.

Fitch Ratings said it still rated the Greece to BB + with a negative perspective and did not comment on a report in the German newspaper Sueddeutsche Zeitung that it was considering downgrading the rating of the Greece to b or B - this week.

The Executive of the European Commission said he hoped a decision within weeks to reduce the rate of interest required in Ireland to make more sustainable debt of Dublin.

"The Commission is clearly for lower rates," said a spokesman for EU economic and Monetary Affairs Commissioner Olli Rehn. "The Commission is against the debt restructuring."

IRELAND IS EXPECTED CUT

Irish Minister Enda Kenny told Parliament that without a return to strong economic growth, "sustainability issues will remain" on the debt of his country.

"Il there is no doubt that a reduction in the rate of interest on the money, we are borrowing Europe would be useful and appreciated", he said, predicting that il could be delivered to a meeting euro-zone finance ministers next week.

Submission of the new Irish Government for lower interest payments has so far been blocked by the Germany and the France, who want to Dublin to abandon the right of veto on the harmonization of the tax for companies in Europe in Exchange or to raise its own rate low corporate tax. Kenny clearly that he would not consent to raise tax on corporations.

In Germany, a legislature than the Conservative Party of Chancellor Angela Merkel said another cut of the rate on emergency loan to the Greece, already reduced by a percentage point in March, would be justified if it carried out more reforms.

Michael Meister, finance policy spokesman Christian Democrats in Merkel, told German radio he is opposed to any idea that Athens should restructure its debt or that it should consider leaving the euro.

Calls to low interest rates came after a group of decision makers in area euro top was not-so-secret talks in Luxembourg Friday on how to stem the crisis.

One of the German Government economic advisers, Peter Bofinger, said television Reuters Insider that unless there was a comprehensive solution for all euro-zone debt problems, "I don't know if the euro zone will remain intact for the next 12 months."

ANGELA MERKEL TO MEET EU TOP BRASS

The cost of insuring Greek, Irish and Portuguese debt against default were increased and European shares fell on signs, that the three States are mounting a war of auction for easier terms pointing to make concessions to each other.

A report by the German magazine Der Spiegel on Friday alleging that the Greece considering leaving the euro drew denials is unworthy of Athens and the EU Ministers.

Spokesman for Merkel said that she would meet with the President of the European Commission José Manuel Barroso, head of the executive body of the EU and President of the European Herman van Rompuy, who chairs the regular summits of the block, on Wednesday to examine the situation.

Output Greek euro was never under discussion and was not now, he said at a press conference.

The euro area and EU Finance Ministers are due next week to approve a rescue of 78 billion euros for the Portugal amid persistent uncertainty about the opportunity to meet the Finland, was an interim Government, which has not yet begun talks on a new coalitionwill be able to give the required agreement.

Pressure is mounting for these meetings deliver decisions on the Ireland and the Greece as well, but the sources of the euro area said that no action was probably on the Greece until June at the earliest.

The Finance Minister Greek George Papaconstantinou, who attended the meeting of Luxembourg, said investors did not believe that his country could return to the capital markets of the next year, as foreseen in its plan of EU and the IMF, so it may be necessary to alternative financing.

Jean-Claude Juncker, President of the Eurogroup of Finance Ministers of the 17-nation euro zone, said after the talks Friday there was a consensus that Athens would require a second rescue operation.

Greece, which has a mountain of debts of 150% of the gross domestic product, is supposed to raise 27 billion euros in the market in 2012, according to the rescue plan existing.

"For the moment, the most likely outcome is for policy makers to commit to provide Greece with additional funds and may extend the maturity of its existing loans of rescue, effectively postponing a Greek restructuring," Ben may, European Economist at Capital Economicswrote in a note to clients.

Market analysts are convinced that Athens would have to reduce its debt essentially by a mixture of rescheduling of the deadlines, a decrease in the rate of interest and private investors convincing to take voluntary loss to avoid a messy failure.

Some believe also is unable to repay its debt, set to 120% of GDP in Ireland and will be facing political pressure to make the holders of Bank share the cost of mounting.

On Sunday, an Irish Minister said that Dublin a look to see what he can win his rescue EU/IMF plan if the Greece is given a new contract to solve the crisis of concessions.

EU eyes of lower rates for the Greece, the Ireland amidst the chaos (Reuters)

Brussels/BERLIN (Reuters) - the European Union seeks to lower interest rates on loans to rescue in Greece and Ireland and is working on a second door relief in Athens in a chaotic effort to prevent a disorderly debt restructuring.

The Executive of the European Commission, said Monday he hoped to see a decision within weeks on the reduction of the rate charged to the Ireland to make more sustainable debt of Dublin.

"The Commission is clearly for lower rates," said a spokesman for EU economic and Monetary Affairs Commissioner Olli Rehn. "The Commission is against the debt restructuring."

Submission of the new Irish Government for lower interest payments has so far been blocked by the Germany and the France, who want to Dublin to abandon the right of veto on the harmonization of the tax for companies in Europe in Exchange or to raise its own rate low corporate tax.

In Germany, a legislature than the Conservative Party of Chancellor Angela Merkel said another cut of the rate on emergency loan to the Greece, already reduced by a percentage point in March, would be justified if it carried out more reforms to reduce its debt risk.

Michael Meister, finance policy spokesman Christian Democrats in Merkel, told German radio he is opposed to any idea that Athens should restructure its debt or that it should consider leaving the euro.

However, the German Finance Ministry spokesman Martin Kotthaus told a press conference: "there is no discussion at this time to extend the payment schedule or to lower the interest rate for the Greece."

Calls to low interest rates came after a group of decision makers of top euro-zone has been non-so-secret talks at Luxembourg on Friday evening on the way to the currency bloc deepen the crisis of the sovereign debt of the stem.

The cost of insuring Greek, Irish and Portuguese debt against default rose again Monday as market jitters hardened on the risk that the Greece may have to restructure its debt, forcing investors to take losses.

European shares fell in the middle of the signs that eurozone States three in intensive care are staging a war of auction for easier terms by pointing the concessions to each other.

The trac also followed a report by German magazine Der Spiegel, alleging that the Greece considering leaving the euro, which attracted denials indignant Athens and EU Ministers.

ANGELA MERKEL TO MEET EU TOP BRASS

A German Government spokesman, said that Mrs Merkel would meet, President of the European Commission José Manuel Barroso, head of the executive body of the EU and President of the European Herman van Rompuy, who chairs the regular summits of the blockon Wednesday to examine the situation.

Output Greek euro was never under discussion and was not now, he said at a press conference.

The euro area and EU Finance Ministers are due to meet the week next to approve the program of the Portugal in the Middle persistent uncertainty if the Finland, that an interim Government and has not yet begun negotiations for a new coalitionwill be able to give the required agreement.

Pressure is mounting for these meetings deliver decisions on the Ireland and the Greece as well.

In response to the wrath of some countries which are not invited to the talks Friday, a spokesman for the German Finance Ministry insisted there was no attempt to create a eurozone of two classes.

The Finance Minister Greek George Papaconstantinou, who attended the meeting of Luxembourg, said investors did not believe that his country could return to the capital markets of the next year, as foreseen in its plan of EU and the IMF, so it may be necessary to alternative financing.

Jean-Claude Juncker, President of the Eurogroup of Finance Ministers of the 17-nation euro zone, said after the talks Friday there was a consensus that Athens would require a second rescue operation.

"We believe that the Greece not need another adjustment program," he said after meeting with Ministers of the Germany, France, Italy, Spain, and the EU Rehn President of the Central European Bank, Jean-Claude Trichet.

He gave no details, but a source in the euro area said a review idea was for the relief fund of European financial stability facility to buy Greek bonds on the primary market for the next year issuancein exchange for a new form of guarantee.

Greece, which has a mountain of debts of 150% of the gross domestic product, is supposed to raise 27 billion euros in the market in 2012, according to the rescue plan existing.

Market analysts are convinced that Athens must reduce its debt substantially by a mixture of rescheduling of the deadlines, rates low interest and eventually convincing private investors to take voluntary loss to avoid a messy failure.

Some believe also is unable to repay its debt, set to 120% of GDP in Ireland and will be facing political pressure to make the holders of Bank share the cost of mounting.

On Sunday, an Irish Minister said that Dublin a look to see what he can win his rescue EU/IMF plan if the Greece is given a new contract to solve the crisis of concessions.

Minister of energy Pat Rabbitte said he hoped that Ireland won a 1 percentage point cut in the rate that is paid on some 40 billion euros of loans from the EU at the meeting of Finance Ministers of the EU.

(additional reporting by Stephen Brown in Berlin, Dina Kyriakidou Athens, Crimmins Carmel in Dublin and William James in London; written by Paul Taylor and Mike Peacock-mounting)

German economy Minister rejects the output of Greece of euro

BERLIN - the Minister of the economy of the Germany dismissed speculation Sunday that the Greece should abandon the euro area and return to the Drachma, arguing that this would weaken only Europe at a time where it should be strengthened.

"I am not that... I would rather much more of the contrary opinion," Rainer Bruederle said Reuters on the sidelines of the meeting of an internal parliamentary group of the free Democrats (FDP) in Berlin.

"Our goal instead must be to strengthen Europe."

On Saturday, fellow FDP MP Frank Schaeffler said that Germany should support constructive Athens way if he chooses to leave the euro zone.

Schaeffler was joined by Ifo Institute President Hans - Werner Sinn, who said Sunday weekly Frankfurter Allgemeine Sonntagszeitung (FASZ) that a Greek exit is preferable to permanent tax transfusions from German coffers.

In addition, by pursuing austerity simply remain in the euro area, Athens condemns its population a brutal internal devaluation through spending on wages, bringing potentially and low.

"The country and then almost come to a State of civil war," he said the paper, comparing the situation in the crisis of the Weimar Germany, when the deflationary policy of Chancellor Heinrich Bruening contributed to Nazi power.

Clemens Fuest of Oxford University, who is also a Senior Advisor to the German Finance Ministry, has pleaded for a restructuring Athens considers that the abandonment of the euro.

"Output is feasible in principle", Fuest has told the FASZ.

"But the first step to resolve the problem of debt in the euro area must be a hair cut." Then one can think on the question of whether the Greece wants to stay in the euro area. ?

Speaking at the Reuters news agency, Bruederle, said Greek time to run their reforms, something rendered more difficult by market constant talk about a possible debt restructuring and now exit from the euro area.

"That the Greeks have a hard road before one of them is a secret," said the Minister of the German economy.

"Speculation day and out only leads to speculation more and not strengthen Europe."

Bruederle also criticised as "irritant" policy of communication surrounding a meeting Friday of the main Finance Ministers of euro area at the Luxembourg, the first time by Spiegel Online only to be subsequently refused as "totally wrong" by the spokesman of the President of the Eurogroup Jean-Claude Juncker.

An official of the Government on Saturday, said that the meeting was only informal and as such was not empowered to make decisions about the Greek crisis.