Tags: European | Leaders | Save | Greece

European Leaders See No Need to Bail Out Greece

Friday, 05 Mar 2010 03:32 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
European leaders expressed confidence on Friday that new austerity measures planned by Greece would be enough to pull the country out of its debt crisis and make any bailout unnecessary.

Greek Prime Minister George Papandreou received political support but no promise of financial aid at talks in Berlin with Chancellor Angela Merkel and in Luxembourg with the influential chairman of the Eurogroup, a forum for finance ministers from the 16 countries that use the euro.

"Greece has not asked for financial aid. The euro zone is stable at the moment. And therefore this question (of aid) does not present itself," Merkel said at a joint news conference with Papandreou.

"We can't predict all the scenarios what will occur over the next 10 years. But the question does not present itself today and we are working to ensure it will not in the future. I am optimistic that will be the case."

Luxembourg Prime Minister Jean-Claude Juncker, who also heads the Eurogroup, described the new Greek austerity plan, as "strong and tough." He said Europe stood ready to help Greece, but added: "I don't think that action will be needed."

As Papandreou began his diplomatic tour, the Greek parliament passed a bill that included many of the 4.8 billion euros ($6.5 billion) in savings and tax hikes the government unveiled this week.

EU leaders have backed the plan but Papandreou's government faced new protests at home on Friday, with police clashing in front of parliament with stone-throwing youths opposed to the tough steps, which include a hike in value added tax (VAT), a freeze in pensions and cuts in public sector wages.

A poll showed three-quarters of Greeks oppose the plan, which has also had a limited impact on financial markets.

Despite a boost from the sale on Thursday of a 5 billion euro 10-year syndicated bond, the spread between Greek government bond yields and those of benchmark German Bunds remains high at 288 basis points -- about 70 points more than just two months ago.

And some analysts believe the markets may continue to punish Greek assets until its euro zone partners come up with more concrete financial aid.

"The current spread over Bunds is hardly a sign of market confidence in Greece's debt sustainability," said Marco Annunziata, chief economist at UniCredit Group.

"The EU should put its money where its mouth is and pledge concrete support to Greece. And it should do it now."

Athens needs to borrow 53 billion euros ($72 billion) this year — at least 20 billion of it by the end of May — to repay existing debt and cover its huge budget deficit.

The euro's credibility is threatened, and leaving Greece to fend for itself could unnerve markets further. Problems could then spread to other euro zone states such as Spain or Portugal.

While acknowledging that Greece's economic woes were largely self-made, Merkel also took aim at speculators in the market that she said were feeding on the country's woes.

She said the use of credit default swaps (CDS) by some investors was the market equivalent of insuring a neighbor's house in order to destroy it and then make money, vowing to crack down on the instruments.

"We will ask the Commission to make this a European issue, but we must also ask our partners in the United States because the speculation is global and isn't limited to the European borders nor those of the euro zone," Merkel said.

Witnesses said police used teargas to disperse stone-throwing youths and scuffled with other protesters during the latest protests in Athens.

Private sector union GSEE announced a strike for March 11 and public sector sister union ADEDY said public workers would also stop work that day. The two unions represent about 2.5 million workers, half of Greece's workforce.

An opinion poll carried out by Public Issue for Skai TV showed about three-quarters of 530 people surveyed in Greece disapproved of the government's moves. But 78 percent believed there was a high probability all the government's moves would be implemented.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

GOP: Raise Minimum Wage, Vote for Common Sense

Thursday, 23 Oct 2014 00:18 AM

Democrats in the Senate, and President Obama, have expressed support for raising the federal minimum wage from $7.25 an  . . .

Ed Royce: 'Are We Doing Enough' to Stop Terror Attacks?

Wednesday, 22 Oct 2014 22:40 PM

Rep. Ed Royce said he thinks laws will be changed in Great Britain and Canada to stop the sort of homegrown terrorist at . . .

Ebola Death Toll Rises to Almost 4,900

Wednesday, 22 Oct 2014 22:28 PM

The number of people with Ebola is set to hit 10,000 in West Africa, the World Health Organization said, as the scramble . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved