Signs Of Greek Default Highlight &Nbsp; The European Debt Crisis Suddenly Escalated.

Prior to this, because of the European Central Bank's bond purchase plan disagreement, the executive committee member of the bank and chief economist stark announced his resignation on September 9th.

Analysts believe that the resignation of stark suggests that there are great differences in the European Central Bank's internal bond purchase plan, which may weaken the confidence of the eurozone authorities in coping with the European debt crisis.

"Hawk" Stark's resignation

Stark is a German economist who holds a hawk stance on inflation. His original date of departure is May 31, 2014.

According to the Dow Jones newswires report, German finance minister Schauble said 10, the German government has nominated Joerg Asmussen, the 44 year old Vice Minister of finance, to replace Stark's position in the European Central Bank.

Since the outbreak of the European debt crisis, the European Central Bank began buying Greek and Portuguese national debt for the first time in May last year.

This measure has been debated within the European Central Bank.

In August, the European Central Bank restarted its bond buying program to stabilize yields in Italy and Spain.

According to Reuters data, since May 2010, the European Central Bank has bought about 132 billion member states' treasury bonds.

Representatives of the four countries, including Stark, from Germany, Holland, Belgium and Luxemburg, are firmly opposed to the plan. They believe that the role of the ECB is to develop a stable and unified monetary policy, and that bond purchases deviate from the significance and foundation of the central bank's existence.

Webb, the former German central bank governor, resigned in February and withdrew from the competition for the next ECB president, and Webb opposed the ECB bond purchase plan from beginning to end.

Stark became the second German official to leave the European Central Bank this year after Weber.

Analysts believe that in just six months or so, the two representatives of the European Central Bank resigned, indicating that the controversy over the policy of bond purchase has been heated up. Meanwhile, the attitude of Germany and the European Central Bank in the process of dealing with the European debt crisis has been significantly divided.

Manfred Newman, a consultant to German central bank governor Wiedemann, said: "Stark's objection to the ECB's purchase of government bonds is consistent with that of Webb and Wiedemann. All Germans hold this position. German policymakers clearly hold different views on the ECB's policy."

Brze J Ki, an analyst at Holland International Group, thinks that Stark's departure may only make the European central bank less hawk, but more importantly, the credibility of the European Central Bank will be affected.

After the announcement of Stark's resignation, the market's worries about the European debt crisis suddenly escalated. On the 9 day, the euro fell to 1.64% against the US dollar and hit a six month low.

Last week, the euro fell 3.2% against the dollar, the biggest weekly decline since July 2010.

Market analysts believe that the euro will remain fragile this week.

There are signs that fund managers have begun to cut their Euro positions.

According to Bloomberg data, Greece's two-year Treasury bond yield rose 1.93 percentage points to 57% on the 9 day, while the 5 year credit default swap (CDS) price jumped 475 basis points, reaching a record 3500 basis points, becoming the world's highest rate of default swap contract.

Jacks Cayo, chief European economist at Royal Bank of Scotland, said: "Germany seems to be preparing for a Greek default. It may be the first country to take action."

It is reported that the German government is discussing how to support the German banking industry if there is no access to new loans from Greece.

Greek Deputy Prime Minister and finance minister Venizelos announced on 11 th that the Greek government will levy a new property tax in 2011 and 2012. The tax and fee standard will be 4 euros per square metre per year. The salaries of all elected officials such as the president and prime minister will be reduced.

The July 21st summit of the euro zone decided to provide Greece with a new round of aid loans amounting to 109 billion euros.

But at present, the European Union, the European Central Bank and the International Monetary Fund (IMF) have disagreed with the Greek government on the goal of deficit reduction and economic reform in the country, and suspended the assessment of Greece's reform.

Analysts believe that in the harsh financial

Apart from Greece and other heavily indebted members, the European debt crisis is being disseminated from the periphery of the euro area to the core.

According to the Wall Street journal, the credit rating of Paris Bank of France, Societe Generale de France and Credit Agricole of France may be lowered by Moodie this week because of large Greek sovereign bonds.

Moodie put the three banks on the negative watch list in June 15th, and the average rating period is three months.

According to the bank for International Settlements, the risk exposure of French banking to Greek debt is second only to that of Germany.

At present, French banks have begun to write down their holdings of Greek debt.

Analysts believe that if the ratings of these three banks are down, they may trigger an upsurge in market liquidity concerns in Europe.