European leaders will meet July 21st in Brussels to determine the next steps in dealing with the Greek debt crisis and the growing concern over Portugal, Spain, and Italy. In a statement releases yesterday, European Central Bank President Jean-Claude Trichet gave assurances that the Council “can manage the issue” and overcome the growing dilemma.
Trichet also confirmed that bonds issued by any sovereign country that does default can not be used as collateral with the ECB.
“If a country defaults, we can no longer accept as normal eligible collateral defaulted bonds issued by the government of that country,” Trichet said. “Because, in the eyes of the Governing Council, this would impair our ability to be an anchor of confidence and stability.”
Source: Bloomberg