Default might be on Greek agenda

Euro group finance ministers will be holding talks on 11^th of May to resolve the crisis. Policy makers including German Finance minister Wolfgag Schäuble, Euro group chair and Dutch finance minister Mr. Dijsselbloem have warned market participants not to expect any resolution from the meeting as it would be about updates on progress made.

• IMF has warned that Greece stands too far off in its current € 172 billion bailout program that it might lose vital financial support unless European lenders write off significant amount of debt. The warning was delivered from Poul Thomas, head of IMF's European department.

Too much default word, used in official comments in recent days suggests that European creditors and Greece might be preparing for another debt restructuring if not default.

On another hand credit rating agencies suggested that Greek bonds would not be marked as default if write off occurs only with public sector debt.

Greece will be running budget deficit this year of 1.5% of GDP due to interest payments close to 3% of GDP this year. This deficit would finally result in higher debt burden for Greece.

European commission has released economic forecast for Eurozone economic activity and expects Greece's economy to grow only 0.5% this year, down from its own projection of 2.5% just three months ago.

Greek bonds are moving sharply down with benchmark 2 year and 10 year yields moving beyond 20% and 10.5%. Greece is due to pay IMF € 0.77 billion on May 12.