Juncker said Greece needed to adopt a process similar to the Treuhand agency, used by Germany to sell off 14,000 former East German firms between 1990 and 1994 – even though Treuhand failed to deliver any profit, oversaw huge job losses and eventually closed its books with a deficit. But he did appear to acknowledge that the Greeks were hostile to foreign officials appearing to take charge: "One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the eurozone." Athens, together with European leaders and the IMF, must now start work on a second €110bn bailout for Greece, which must be finalised by September and is likely to include private-sector involvement. The European commission conceded on Saturday, after the two-hour Eurogroup teleconference agreed the fifth tranche payout, that any plan to cut Greece's debt of 160% of economic output would be at risk of being derailed by internal unrest or external economic conditions. Growth just one percentage point below expectations, it said, would push Greece's debt to 170% of GDP, and rising, past 2020. For the first time, the commission's report also discusses debt restructuring, including a possible 40% "haircut" – a forced reduction in the value of Greek bonds – which would devastate Greek banks and, the report warns, could reverberate on Ireland, Portugal and Spain.

Analysts are increasingly questioning the French and German governments' plan for holders of Greek bonds to swap them for new loans as part of a fresh aid package. The Greek prime minister, George Papandreou, met his side of the rescue bargain last week by winning MPs' approval for radical new austerity measures, including €50bn of privatisations, public sector wage cuts and widespread civil service job losses. But eurozone ministers have so far failed to agree details of a new rescue, expected to be up to €110bn. The debt-swap proposal, which French and German banks have agreed to, involves offering new 30-year loans in exchange for expiring bonds, to meet Germany's demand that investors bear some of the costs of a new Greek bailout. But analysts say it is likely that ratings agencies could still brand the plan a default. That would trigger chaos in world markets, as investors were forced to slash the value of their Greek debts - and could also lead to Portugal and Ireland, the other bailed-out eurozone states, having their debts downgraded. Simon Derrick, chief currency strategist at BNY Mellon, said: "When you compare the French plan to what the ratings agencies have said, it looks as though they would make it a default." Standard & Poor's said no final decision would be made on the scheme until the full details were published but pointed out a recent statement setting out the reasons a debt-swap might still constitute a default. "While an exchange offer for longer-dated bonds may appear to be 'voluntary', we may conclude that investors have been pressured into accepting because they fear more adverse consequences were they to decline the exchange offer," S&P said.

Global economic recovery slips into lower gear as industrial activity dips - A sharp bounce in stock markets following agreement in the Greek parliament to pursue EU-sponsored austerity measures became more muted after it became clear a global slowdown in manufacturing was firmly under way. "Over the past two months, [euro-zone manufacturing] output growth has weakened to the greatest extent since late-2008," said Chris Williamson, chief economist at Markit, which compiled the surveys. The US was the only bright spot, adding to expectations the economy may be recovering from a recent slowdown. The US Institute for Supply Management said its index of national factory activity rose to 55.3 from 53.5 the month before. The reading beat expectations for a decline to 51.8, according to a Reuters poll of economists. The UK's Markit/CIPS purchasing managers' index showed a bigger than expected drop to 51.3 from 52 in May, revised from 52.1. David Noble, chief executive at the Chartered Institute of Purchasing & Supply, said: "The UK's manufacturing sector is slipping into 'growth-lite' mode, a far cry from the strong expansion seen earlier in the year." For the second quarter as a whole, the average PMI reading of 52.6 is the lowest since the recovery began in the autumn of 2009. Export orders and employment slowed to the weakest growth rate since last September. Rob Dobson, senior economist at Markit, said: "It is worrying to see that slowdown is not just being driven by the demise of domestic market strength, with growth in new exports having also slowed since the start of the year as the global economic recovery drifts into a softer patch." Input price inflation slowed sharply to the slowest rate in one-and-a-half years, reflecting recent falls in the cost of oil and other commodities. Output price inflation – measuring the prices charged by manufacturing – was the weakest since last December.

Total Lloyds job cuts now almost 45,000 - Lloyds Banking Group boss announces 15,000 job cuts - António Horta-Osório stamped his mark on Lloyds Banking Group on Thursday, cutting 15,000 jobs and pledging to revitalise the Halifax brand in an effort to help taxpayers make a profit on their £20bn investment in the bailed-out bank. On a bleak day for employment in the banking industry, HSBC also cut 700 jobs at its UK arm to save £9m – a sum officials at Unite noted was the same as the bonus of chief executive Stuart Gulliver. While unions were furious about the scale of the job losses at Lloyds – which are now on track to touch 45,000 as a result of the rescue of HBOS during the 2008 crisis – the City applauded the actions of Horta-Osório, who was presenting the outcome of a strategic review he conducted after taking the helm of Lloyds on 1 March. The Portuguese-born banker, who was lured from Spanish bank Santander, was at first unrepentant about the scale of the job cuts although later admitted: "I do regret that we have to do this. I would prefer to put this bank back on its feet without reducing staff." But, he insisted the cuts were essential. "We have to do this. This bank has lost money, it's losing money this year on an after-tax basis. "We have to get this bank back on to its feet to support the UK economy and we have to pay taxpayers' money back," he said.

Research published today by Ricoh Europe reveals that European businesses could be missing out on potential profit increases of €46 billion, due to the existing, inefficient methods used to process information. TheRicoh Process Efficiency Index shows that employees across Europe responsible for managing business critical document processes spend approximately 362 million hoursof their time per year on the function, which amounts to an overall business cost of €147 billion. The Index examines how European organisations are managing their business critical document processes; those that occur regularly and repeatedly and have a direct impact upon businesses interactions with clients and employees. For example, purchase orders, patient records or invoices. The study also identifies the areas for improvement and the economic return that those improvements could deliver. Carsten Bruhn, Executive Vice President, Ricoh Europe said: "This report is essential reading for every European CIO. It highlights that if European businesses are to meet the challenge of competing with emerging markets, it is essential that they look at the efficiency of their business critical document processes." "The Index clearly illustrates how outdated, manual processes have multiple impacts on the business. For example, if critical information is processed using traditional hard-copy methods, business risk is enhanced as they are less likely to be backed-up. They are also easier to lose, making them more prone to security breaches. It is also inevitable that employees are spending unnecessary time processing business documents, instead of focusing on the core business transactions and customer service."

GREECE - The votes are just in, and the €28bn (£25bn) austerity bill has been passed, but Greece's troubles are still a long way from being resolved. What has the Greek parliament just voted through? The programme covered €28bn of spending cuts and tax rises, and permission for €50bn of asset sales. Measures include cuts to public sector pay, a new solidarity levy on income, and cutbacks in government spending. Here's a full rundown of the key measures. Does this mean victory for prime minister George Papandreou? Not yet. The Greek parliament will reconvene on Thursday to vote on an enabling law that will allow the government to speed up the pace of reform. This will also include a specific breakdown of some of the fiscal measures, including the tax changes and a €50bn privatisation programme. Analysts believe this could be even tighter than Wednesday's vote, given Papandreou's narrow majority. Why did MPs agree to these measures? Greece has been struggling to meet the conditions of the original €110bn rescue loan agreed with the EU and the International Monetary Fund last year. Eurozone finance ministers had insisted on tougher austerity measures in return for the next slice of the package, worth €12bn. What would happen if Greece did not receive the €12bn? More than €6bn of Greek government bonds mature in July, meaning they must be repaid then. Another €6.6bn matures in August. Greece cannot roll the debt over by issuing new bonds, as the financial markets are now demanding ludicrously high interest rates on Greek government borrowing. The €12bn tranche of aid is already earmarked to cover these payments – without it, an immediate disorderly default looked inevitable.

French finance minister Christine Lagarde has become the new head of the IMF after the fund's board confirmed her appointment following a meeting in Washington. Lagarde, who takes over from Dominique Strauss-Kahn, is the first woman to hold the post. She will begin her five-year term on 5 July. After the board's announcement, Lagarde tweeted: "The results are in: I am honored & delighted that the Board has entrusted me with the position of MD of the IMF!" Official confirmation came after the US hadformally endorsed Lagarde's candidacy. Treasury secretary Tim Geithner said: "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy. We are encouraged by the broad support she has secured among the fund's membership, including from the emerging economies." French president Nicolas Sarkozy was quick to show his support for his compatriot. He said in a statement: "The French presidency rejoices that a woman is taking on this important international role." Chancellor George Osborne hailed Lagarde's appointment as "good news for the global economy and for Britain." He said: "She is the best person for the job, which is why Britain was one of the first countries to propose her. She has been a strong advocate for countries tackling high budget deficits and living within their means." Lagarde has the support of most European countries, and is seen as an ideal candidate to handle the IMF's ongoing bailout of weak eurozone countries. Many observers felt the time had come for a non-European to take the post, but despite initial coolness towards her candidacy China and Russia backed Lagarde's appointment. Along with the US, she has the explicit support of nations including Indonesia and Egypt, representing more than half the IMF's 24 voting board members. The executive board represents the 187 members of the IMF.

EUOBSERVER / BRUSSELS - European lenders are considering the 'first draft' of a plan put forward by French banks for a rollover of some 70 percent of the banks' holdings of Greek debt. Unveiled by French President Nicholas Sarkozy on Monday (27 June), the plan would involve private bondholders agreeing to re-invest back in Greece half the amount of their holdings as they matured, swapping the debts for new longer-dated bonds. The maturity on the new bonds remains up for discussion, with some German sources saying the suggested extension to 30 years is too long, but the aim is to partially free the country from having to repay its debts in the near term, relieving some pressure from the insolvent nation. A further 20 percent of debts coming due would be invested in triple-A bonds via a special purpose vehicle. EU nations are hoping to convince private creditors to engage in such voluntary rollovers amounting to around €30 billion, representing just under a third of the amount of a potential second bail-out of the country. The French scheme was considered alongside other options at a meeting in Rome on Monday night of some of the most powerful figures in international banking, with executives flying in to talks with eurozone and European Central Bank representatives regarding the voluntary rollover.

CITIZEN ADVICE - The economic downturn is pushing consumers into the hands of con merchants and rogue traders who have "never had it so good", Citizens Advice warned this week. The national charity says the current economic conditions have led to an unprecedented boom in that exploit people's need to save money on bills, increase their income, and find work and affordable housing. It says there is a growing problem with unscrupulous employers advertising fake "jobs" that require fees to be paid in advance. Increasingly, it adds, "phantom flats" are offered to would-be tenants, who are then asked to prove they can pay the rent by transferring money to the landlord: money they never see again. It also warns that some money transfer services and classified ad websites can sometimes be channels for fraud. The warning chimes with Guardian Money's postbag, which is increasingly seeing complaints about bogus websites offering desirable products such as cameras at low prices. Fraudsters set up the sites, trade for a short time and then disappear with the cash. If a camera or pair of designer jeans looks too cheap, there is usually a reason why, say police. Meanwhile, as the summer music festival season gets underway, fans are being urged to be on their guard against sophisticated online rip-offs run by organised gangs of "cyber criminals", in which they are duped into buying fake or non-existent tickets. Experts at Get Safe Online, a government-backed initiative, are warning that the problem will get worse as the wave of events provides rich pickings for the fraudsters. More than one in 10 people (or their friends and family) say they have already been a victim of an online ticketing scam. According to Get Safe Online, criminals are increasing efforts to dupe consumers into visiting fake ticket websites. They are passing off their operations as supposedly genuine businesses, and are often willing to make significant investments for high returns. For example, they will often pay for search advertising (such as Google AdWords) so their fake sites appear at the top of event search results. And they even enlist professional web designers so that their sites appear genuine. One method used by scammers is targeting band websites, forums and social networking sites. Posts will be displayed from "fans" claiming they have bought tickets from a certain site and encouraging those not yet successful in getting theirs to visit it. More consumers are then driven to the fake site.

GREECE, WHO'S EXPOSURE IS IT ? - It's not the direct exposure, it's the indirect exposure and the implications of an unruly default that I would be worried about. French and German banks bought Greek bonds, and they took out insurance against default. Who did they take out that insurance with? The US and UK banks. There has to be a loser – who's the loser?" A fresh bailout for Greece will go ahead on condition that its parliament votes for new austerity and reform programmes. It is expected to total about €110bn, with about €30bn coming from bondholders, €30bn from privatisations and the rest from eurozone members and the IMF. Persuading the private sector to play a part is seen as crucial to the chances of averting a Greek disaster and was a key part of German chancellor Angela Merkel's pitch in Brussels. Without this, EU leaders fear Greece will default, triggering payouts on a web of complex financial insurance products and creating chaos in world markets as investors struggle to work out who owes what. Some analysts fear default could create a "Lehman moment", like the aftermath of the collapse of the giant US investment bank in 2008, when investors lost confidence in each other and the world financial system froze up. At the inaugural press conference for the Bank of England's new financial policy committee, governor Sir Mervyn King described the deteriorating situation in the eurozone as a "mess" and warned that, although Britain's banks own a relatively small number of Greek bonds – about £3bn worth – there could be dramatic knock-on effects if a default resulted in a loss of confidence throughout the global financial system. That gives Treasury officials a strong incentive to ensure that the banks sign up. Without a voluntary agreement from investors, the powerful credit ratings agencies will declare that Greece has defaulted, spreading chaos. US Federal Reserve governor Ben Bernanke last week urged European governments to resolve the Greek crisis or risk threatening "the European financial system, global financial system, and European political unity".

Global stock markets bounced back on Friday after European Union leaders reached agreement on a €120bn (£105bn) bailout for Greece. Most Asian markets were up, with the Nikkei in Tokyo gaining 0.85% to 9678.71 and Hong Kong's Hang Seng rising 1.6% to 22,115.24. The FTSE 100 index in London opened 75 points higher. On Thursday, it closed down 98.61 points at 5674.38 after downbeat comments on the state of the economy from the US Federal Reserve chairman, Ben Bernanke. European leaders agreed on Thursday night to launch a fresh bailout of Greece, assuming the country passes an austerity package next week. Britain is to be spared from taking part in the rescue after leaders accepted David Cameron's argument that the bailout should be borne by the eurozone. The rescue will be provided by Greece's "euro partners and the International Monetary Fund", meaning that Britain is exempt from the European part of the package. Germany had been insisting that the bailout should be partly funded by all 27 EU members, but backed off. Without the final tranche of last year's €110bn bailout – €12bn from the eurozone and the IMF – Greece would be broke by mid-July. Brent crude oil rebounded by more than a dollar to $108.70 a barrel on Friday morning, after tumbling 6% on Thursday when the International Energy Agency announced the release of 60m barrels of emergency oil supplies on the market in an attempt to stem soaring petrol and other energy prices. US crude climbed to $92.34 a barrel. It is only the third time in the 37-year history of the IEA that oil has been released in this way and follows repeated calls on Opec to turn on the taps and bring down the price of oil.

Much of Europe is now engaged in achieving quick reduction of public deficits through drastic reduction of public expenditure and it is crucial to scrutinise realistically what the likely impact of the chosen policies may be, both on people and the generating of public revenue through economic growth. The high morals of "sacrifice" do, of course, have an intoxicating effect. This is the philosophy of the "right" corset: "If madam is at all comfortable in it, then madam certainly needs a smaller size." However, if the demands of financial appropriateness are linked too mechanically to immediate cuts, the result could be the killing of the goose that lays the golden egg of economic growth. This concern applies to a number of countries, from Britain to Greece. The commonality of the "blood, sweat and tears" strategy of deficit reduction gives some apparent plausibility to what is being imposed on more precarious countries like Greece or Portugal. It also makes it harder to have a united political voice in Europe that can stand up to the panic generated in the financial markets. In addition to a bigger political vision, there is a need for clearer economic thinking. The tendency to ignore the importance of economic growth in generating public revenue should be a major item for scrutiny. The strong connection between growth and public revenue has been observed in many countries, from China and India to the US and Brazil. There are lessons from history here, too. The big public debts of many countries when the second world war ended caused huge anxieties, but the burden diminished rapidly thanks to fast economic growth. Similarly, the huge deficits that President Clinton faced when he came to office in 1992 melted away during his presidency, greatly aided by speedy economic growth. The fear of a threat to democracy does not, of course, apply to Britain, since these policies have been chosen by a government empowered by democratic elections. Even though the unfolding of a strategy that was not revealed at the time of election can be a reason for some pause, this is the kind of freedom that a democratic system does allow the electorally victorious. But that does not eliminate the need for more public discussion, even in Britain.

The International Finance Corporation (IFC), member of the World Bank Group, and the European Bank for Reconstruction and Development (EBRD) granted a 114.8 million euros loan to Cernavoda Power company to co-finance the construction and exploitation of the 138 MW wind farms Cernavoda I and II, reads a release issued by the two banking institutions. EBRD and IFC each grant a 57.4 million euros loan for Cernavoda Power, whose majority shareholder is EDP Renovaveis, to finance the construction and exploitation of the wind farms.
This is the first "project finance"-type of investment of EBRD and IFC in the renewable energy sector in Romania.
"Supporting the projects devoted to renewable energy is one of the key priorities of EBRD. The Cernavoda-based wind farm will make a major contribution to expanding the capacity to generate wind energy in Romania and to reaching the EU renewable energy standard figures," said Nandita Parshad, EBRD head of power and energy utilities.
The Cernavoda-based wind farm located in the south-eastern region of Dobrogea will become one of the largest wind parks in Romania. Cernavoda I is operational now generating already 69 MW while Cernavoda II will be put into operation soon only to generate another 69 MW. Its total capacity will represent the fourth part of the total capacity of generating wind energy in Romania. AGERPRES

Greece's embattled prime minister has survived the first of a trio of tests that could sink the Greek economy and lay waste to Europe's single currency by winning a parliamentary vote of confidence in his reshuffled government. George Papandreou must now try to drive through a package of savage spending cuts and national assets sales in order to secure a new EU bailout. With the complex effort to stave off a Greek sovereign default moving towards a climax and anti-government and anti-EU protesters laying siege to central Athens, Papandreou won the vote by 155-143 in the 300-seat chamber. Brussels and other EU capitals anxiously watched the drama in Athens prior to a crucial summit of EU leaders. "Good news for Greece and for the EU as a whole," said Jose Manuel Barroso, the president of the European commission. Papandreou's victory removed "an element of uncertainty from an already very difficult situation. His government can now focus all efforts on building support in parliament for the ambitious series of fiscal measures and privatisations." The vote kicked off a crucial three weeks that could make or break the euro. Leaders in Brussels spoke of the worst crisis in Europe since the second world war, the International Monetary Fund (IMF) set ultimatums before the 17 countries of the single currency, and international ratings agencies classified the bailout terms for Greece as a likely default. In order to secure an immediate €12bn lifeline and then EU agreement on a second bailout running to more than €100bn over three years, Papandreou now has to persuade parliament to back a radical programme of spending cuts, tax increases, and a mass assets sell-off by the end of next week

Euro Has Become Greatest Threat to Continent's Future - Finland is a country that is often held up as a successful model for other European countries, but the success of the right-wing populist "True Finns," who captured 20 percent of the vote in April's parliamentary elections, came as a wakeup call to the political establishment in Brussels. As the skeptics gain ground throughout the EU, anti-European sentiments are growing in even the core countries of the union, like France and Germany. The euro, created with the aim of permanently uniting Europe, has become the greatest threat to the continent's future. A collapse of the monetary union would set Europe back by decades, dealing it a blow from which it might never recover, especially with Europe's position already threatened by the fast-growing Asian economies. How is a fragmented Europe to prevail against this new competition? This is why Europe's politicians want to defend the euro at all costs, and why they are approving one bailout package after the next. They are playing for time, hoping that the markets will settle down and the reforms will take hold. The business community is supporting their efforts, too. In a major advertising campaign scheduled to run in leading publications this week, top German business executives, including ThyssenKrupp Chairman Gerhard Cromme, Siemens CEO Peter Löscher and Daimler CEO Dieter Zetsche, promote the monetary union and insist: "The euro is necessary." They argue that ailing member states must be assisted financially, and that the common currency is "absolutely worth this commitment."

The rising cost of buying insurance through so-called credit default swaps (CDSs) on Greek debt came amid continued prevarication among eurozone finance ministers about releasing bailout funds to the indebted country and a warning that Italy's credit rating might be cut. According to Gavan Nolan, credit analyst at Markit, to insure €10m (£8.8m) of Greek debt would cost €2m every year for five years. No other country is as expensive to insure. Venezuela is the next most expensive, but even then is almost half the cost. The Greek government faces a confidence vote on Tuesday, which is adding to anxiety among investors, particularly as European finance ministers have said the bailout needs to be accompanied by austerity measures. Stock markets in Europe were weak on the opening, but a strong start by Wall Street helped to contain losses among European shares, with the FTSE 100 and the German stock market both ending 0.3% lower. However, the Italian market was down further as investors reacted to a warning by Moody's that it might downgrade the country's debt rating. With the cost of insuring against a Greek default rising, City sources were pointing to the potential controversy about whether the country's debt would be tackled in a such a way as to avoid the insurance sold through CDSs paying out. Some sources said they were concerned that if holders of CDSs became entitled to payouts it would cause the institutions that sold the insurance to make multimillion pound payments.

Theon Sunday as a crucial ally of Silvio Berlusconi demanded that the government cut taxes, despite the serious implications that this would have on Italy's public finances. Umberto Bossi, the Northern League leader and arbiter of the prime minister's fate, brushed aside concerns that Italy could go the way of Greece when he told cheering supporters in Pontida that the tax burden in Italy had gone "beyond all limits". Bossi, Berlusconi's partner in Italy's rightwing coalition government, has been under huge pressure from his party's rank and file since local elections last month showed a sharp fall in the league's support. Tax cuts would offer both men the promise of regaining their lost popularity, but could widen the budget deficit of a country that has the eurozone's biggest public debt. On Friday, the rating agency Moody's warned it could downgrade Italy's credit ratings because of concerns that the crisis in Greece could increase eurozone interest rates and derail Italy's already precarious economic recovery. The finance minister, Giulio Tremonti, has been urging prudence on his cabinet colleagues and was reported by La Repubblica to be planning a mini-budget that would include deficit reduction measures totalling €40m (£35m). But Bossi told his supporters: "Tremonti says that we risk ending up like Greece. But, whatever, something has to be done to bring down taxes." While the latest flare-up of the crisis in Europe seems like a summer repeat from 2010, one element is conspicuously absent: doomsday forecasts for the euro. Last spring, as Greece first teetered on the brink, there were rising expectations that the euro would by now have plunged against the U.S. dollar, with some forecasters looking for declines approaching 20%. Talk that the crisis would lead to a breakup of the euro zone added to the gloom. From May to June 2010, analysts on average cut their midyear 2011 euro forecasts to $1.1950 from $1.2920, according to Consensus Economics. threat of a new crisis on the eurozone's southern flank loomed

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 .

The International Monetary Fund for the first time on Friday publicly called on the private sector to help finance Greece and other European peripheral countries, warning that failure to help fund the ailing economies could force sovereign-debt defaults and risk derailing the global recovery. After weeks of brinksmanship over Greece, Germany gave ground Friday, improving the chances that the struggling country will avoid a messy debt default this year that could threaten the stability of the euro currency area. German Chancellor Angela Merkel dropped her government's insistence on forcing a rescheduling of Greek government bonds, ending a six-week standoff that threatened to halt any more loan payouts to Greece. Instead, she said was open to a voluntary rollover of the country's debt. The move came as the Greek prime minister reorganized his government, naming a new finance minister to help overcome public resistance and push an austerity package into law. Greece's financial future appears to be in good hands for the next month as Germany and France have agreed on a plan to handle Greek debt. WSJ Brussels bureau chief Stephen Fidler discusses with the News Hub panel. AP Photo/Ferdinand Ostrop . The focus of the Greek discussions now shifts to Luxembourg on Sunday and Monday, where European finance ministers are due to hold talks. A new aid package for Greece would stave off the threat of a Greek debt default in the short term. But it wouldn't address the bigger challenge facing Europe: the likelihood that Greece won't be able to repay all of its debt, and the difficulty of cutting Greece's debt burden without sparking capital flight from other struggling countries around the euro. Personally, I have no doubt that the European oligarchy will do everithing possible to rescue the ill conceived "euro" ...a burden for all the europeans.

German Chancellor Angela Merkel and French President Nicholas Sarkozy will meet in Berlin Friday - Event Risk - The Greek cabinet was reshuffled on Friday and will face a vote of confidence by Tuesday night. The political moves could be another potential flashpoint in a country already beset by fierce anti-austerity strikes. But some analysts said the euro was holding up well despite the uncertainty as the market held out hopes a solution could be reached and a new three-year bailout plan would be decided in July. "It's difficult keeping up with the event risks but policymakers are whittling down a timetable," said Tom Levinson, FX strategist at ING, adding euro/dollar at $1.4100 could turn out to be good value if progress is made. "This Sunday they should agree on another aid tranche for Greece and in July they should be agreeing the main aid package. Unless something major goes wrong with either the confidence vote or Germany does not soften its terms I think the euro will do better." Investor risk appetite was also hampered on Friday by weak U.S. regional manufacturing data that cemented concerns about a soft patch in the U.S. economy, causing prices in Asia to slump. Economic and Monetary Affairs Commissioner Olli Rehn said euro zone finance ministers will decide at a meeting on Sunday to disburse the next tranche of emergency loans to Greece in early July and decide on the new three-year bailout on July 11. Friday's and Sunday's meetings will be watched closely by the market for reassurance the Greek debt crisis can be resolved. "As an investor I would be quite nervous," said Ankita Dudani, G10 currency strategist at RBS. "There is a lot of uncertainty out there over what Germany wants and it is quite hard to see them coming up with something that works for everyone." Discord between the euro zone's paymaster Germany and the European Central Bank, backed by France, has spooked investors across asset classes, with the European stock index on track for its longest run of weekly declines since January 2008. Germany is insisting banks, pension funds and insurance firms that hold Greek debt swap their bonds for new ones with longer maturities.But fearful this solution could create a "credit event" and prompt rating agencies to label Greece in default, the ECB, European Commission and France all favour a softer option under which holders of Greek bonds would be asked to buy new Greek debt as their holdings mature.