10 Mar 2010

Speculators 'worsening Greece's economic troubles'

5:21 pm on 10 March 2010

Financial speculators are being blamed for worsening Greece's financial woes, and some political leaders want to muzzle their influence.

They say speculators, such as hedge funds, are unfairly betting that Greece will default on its loans through complex financial instruments called credit default swaps.

Such moves are making it more expensive for Greece to borrow funds, the BBC reports

German Chancellor Angela Merkel says quick action is needed to tackle the problem.

European Union President Jose Manuel Barroso has also spoken out, saying it would look at banning purely speculative sales on credit default swaps of sovereign debt.