Impossible for Greece to leave eurozone

European Central Bank President Jean-Claude Trichet said yesterday any aid to help Greece deal with its fiscal crisis should be a loan with conditions attached, adding that it’s legally impossible for the country to leave the eurozone. «We can only be talking about a loan without any subsidy element; that needs to be extremely clear,» Trichet told the European Parliament in Brussels. «A loan is the only possibility in our view.» The euro rose from a three-week low against the dollar on Trichet’s comments which dampened concern about a possible breakup of the eurozone. The euro rose 0.2 percent to $1.3553 in early afternoon trade in New York, from $1.3530 on Friday. Meanwhile, Greek 10-year bonds fell to their lowest since the end of February with yields rising by 16 basis points to 6.51 percent. The risk demanded by premium investors to hold Greek securities over comparable German bonds widened for a third day by 18 basis points to 342 basis points. «The uncertainty over who will provide Greece with funds is extremely high and this is unlikely to support Greek debt,» Kornelius Purps, a fixed-income strategist at UniCredit SpA in Munich, told Bloomberg.

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