Economists are worried a Greek default may stall the European economic recovery.
The Euro fell against the dollar
for the fifth straight day and traders let stocks slide after comments from Greek Finance Minister George Papaconstantinou "failed to dispel concern about a default."
Greece has been under intense scrutiny since January for its excess debt. The country holds over e216 billion in debt.
European Central Bank President Jean-Claude Triche tried to calm investors, saying default was a non-issue for Greece.
Investors throughout the world are watching closely the bond spread for Greek debt.
The main point of interest in the markets Thursday ahead of the European Central Bank rate decision is what is going on with Greek borrowing costs in the money markets - earlier the spread between Greek and German 10-year bond yields widened to 4.4 percentage points earlier, its highest level since the euro was introduced in 1999. The higher the spread, the less confidence markets are showing in Greece's ability to pay.
Economists are still worried
about Greece's ability to pay, espite reassurance from the European Union several weeks ago that it would backstop Greek debt.
"With or without support from the EU the bottom line remains that after years of fiscal mismanagement the market has little confidence that Greece can swallow the necessity austerity measures and slash its budget deficit," said Jane Foley, research director at Forex.com.