Euro zone finance ministers have agreed to a $170 billion bailout for Greece following 13 hours of late night negotiations in Brussels. Athens has in turn pledged to reduce its debt to 120.5% of its GDP by 2020 and to accept "enhanced and permanent" EU monitoring of its economic reforms.
Markets across Europe, however, fell amid concern that the bailout, which will allow Greece to pay its creditors on March 20 and avoid bankruptcy, is only a short-term fix.
The Financial Times reports that a "strictly confidential" report on Greece's debt projections prepared for eurozone finance ministers reveals Athens' rescue program is way off track and suggests the Greek government may need another bail-out once a second rescue runs out.
"Even under the most optimistic scenario, the austerity measures being imposed on Athens risk a recession so deep that Greece will not be able to climb out of the debt hole... It warned that two of the new bail-out's main principles might be self-defeating. Forcing austerity on Greece could cause debt levels to rise by severely weakening the economy while its €200bn debt restructuring could prevent Greece from ever returning to the financial markets by scaring off future private investors."
By midday trading today, London's FTSE was down 0.31%, the German DAX had tumbled 0.67% and the French CAC 40 had depreciated 0.61%.
The euro slipped 0.17% to $1.3222. The British pound depreciated 0.22% to $1.5816.
The Nikkei ( EWJ , quote ) fell 0.23%. Olympus, the Japanese camera and medical equipment manufacturer, is said to be considering executive officer Hiroyuki Sasa, formerly of Sumitomo Mitsui Banking Corp., for the post of president, according to the Wall Street Journal . The scandal-ridden company is trying to recover from a $1.7 billion accounting fraud uncovered last fall. Olympus shares rose 3.89%.
Seoul's KOPSI ( EWY , quote ) slipped 0.03%. Samsung is close to spinning off its LCD unit following approval by the company's board of directors. The electronics firm plans to launch Samsung Display Company Ltd. as a new corporation on April 1. Shares of Samsung rose 0.43%. LG stock, meanwhile, dipped 1.55%.
In Bangkok, the SET Index gained 0.39%. Thailand's economy shrank 9% during the last three months of 2011 compared to the same period a year earlier. The country is still recovering from massive floods last fall that killed 700 and shutdown major industrial operations.
In Shanghai, Chinese shares ( YAO , quote ) appreciated 0.75%, while in Singapore stocks ( EWS , quote ) rose 0.13%. In Australia, shares ( EWA , quote ) appreciated 0.82%.
The Chinese yuan depreciated 0.08% to 6.2961 to the dollar, while the Japanese yen rose 0.1% to 79.72 against the greenback.
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