GERMANY - Chancellor Angela Merkel of Germany has sued for peace with the European Central Bank (ECB), following weeks of feuding over how to rescue Greece from the devastating debt crisis threatening the future of the euro single currency. Merkel announced on Friday that the decisions on a new three-year bailout package for Greece, tipped to run to €120bn (£106bn), would need to be agreed with the ECB. At a Berlin summit with the French president, Nicolas Sarkozy, Merkel softened her terms for the Greek bailout, urged a quick decision, stressed that any participation by private creditors in the rescue should be voluntary, and insisted that a new package with Greece would be agreed together with the ECB. Her climbdown was welcomed by the financial markets, as the prospect of Greece suffering a catastrophic disorderly default receded. The euro rallied strongly, gaining more than one cent against the dollar. Europe's major stock markets also closed higher as traders took a more positive view of the Greek situation. The German media, though, promptly predicted that Merkel's olive branch could cost her politically at home. "For the German government, this is a remarkable shift," said the liberal Sueddeutsche Zeitung. "The chancellor has backed off from a central German demand," said the conservative Frankfurter Allgemeine Zeitung. In a research note, JP Morgan said that Berlin seemed to be dropping its insistence on a bond swap by Greece's private creditors, the central factor that the ECB feared would cause the country to be declared in sovereign default. The Berlin summit came at the end of a week of intense political and market turbulence, with riots on the streets of Athens, a Greek government on the brink of collapse, and bad-tempered disarray among EU leaders. And despite the apparent progress, it remains to be seen how the second Greek bailout in a year will be structured .
Access Investments-Building Awareness - European Union-ROMANIA
Saturday, June 18, 2011
Saturday 6/18/2011
GERMANY - Chancellor Angela Merkel of Germany has sued for peace with the European Central Bank (ECB), following weeks of feuding over how to rescue Greece from the devastating debt crisis threatening the future of the euro single currency. Merkel announced on Friday that the decisions on a new three-year bailout package for Greece, tipped to run to €120bn (£106bn), would need to be agreed with the ECB. At a Berlin summit with the French president, Nicolas Sarkozy, Merkel softened her terms for the Greek bailout, urged a quick decision, stressed that any participation by private creditors in the rescue should be voluntary, and insisted that a new package with Greece would be agreed together with the ECB. Her climbdown was welcomed by the financial markets, as the prospect of Greece suffering a catastrophic disorderly default receded. The euro rallied strongly, gaining more than one cent against the dollar. Europe's major stock markets also closed higher as traders took a more positive view of the Greek situation. The German media, though, promptly predicted that Merkel's olive branch could cost her politically at home. "For the German government, this is a remarkable shift," said the liberal Sueddeutsche Zeitung. "The chancellor has backed off from a central German demand," said the conservative Frankfurter Allgemeine Zeitung. In a research note, JP Morgan said that Berlin seemed to be dropping its insistence on a bond swap by Greece's private creditors, the central factor that the ECB feared would cause the country to be declared in sovereign default. The Berlin summit came at the end of a week of intense political and market turbulence, with riots on the streets of Athens, a Greek government on the brink of collapse, and bad-tempered disarray among EU leaders. And despite the apparent progress, it remains to be seen how the second Greek bailout in a year will be structured .
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