German resistance to giving any more financial support without a sacrifice by creditors of at least 50% of their loans has held up attempts by Brussels to co-ordinate a second bailout. Greece's finance minister, Evangelos Venizelos, has spent the last two weeks locked in discussions with a team representing the banks, insurers and hedge funds that hold Greek debt. It is understood a framework deal is in place outlining the basic structure of a bond swap that Venizelos wants to present at the eurogroup meeting of finance ministers in Brussels on Monday. He needs a deal in place, and approval for a second bailout plan, before a €14.5bn loan refinancing in March. "The atmosphere of the talks is good, they are continuing today and we hope they will be concluded very soon," a government spokesman said. "This is very important for the sustainability of the national debt and our ability to handle the debt." European Union ministers will be meeting in Brussels to reach agreement on a new pact enforcing stricter budget controls in the eurozone that could allow the single currency area's highest court to fine countries that fail to adopt key rules. The European Central Bank wrecked an earlier draft of the agreement after warning that the enforcement powers it proposed were weak and would fail to keep errant countries in line. Under the guidance of Germany's chancellor, Angela Merkel, Brussels has drafted a tighter pact that would allow the courts to punish a country that refuses to implement a balanced budget rule in its national law with a penalty of up to 0.1% of GDP. Every EU country except Britain is expected to sign off on the pact when leaders meet at a summit on 30 January.
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Saturday, January 21, 2012
German resistance to giving any more financial support without a sacrifice by creditors of at least 50% of their loans has held up attempts by Brussels to co-ordinate a second bailout. Greece's finance minister, Evangelos Venizelos, has spent the last two weeks locked in discussions with a team representing the banks, insurers and hedge funds that hold Greek debt. It is understood a framework deal is in place outlining the basic structure of a bond swap that Venizelos wants to present at the eurogroup meeting of finance ministers in Brussels on Monday. He needs a deal in place, and approval for a second bailout plan, before a €14.5bn loan refinancing in March. "The atmosphere of the talks is good, they are continuing today and we hope they will be concluded very soon," a government spokesman said. "This is very important for the sustainability of the national debt and our ability to handle the debt." European Union ministers will be meeting in Brussels to reach agreement on a new pact enforcing stricter budget controls in the eurozone that could allow the single currency area's highest court to fine countries that fail to adopt key rules. The European Central Bank wrecked an earlier draft of the agreement after warning that the enforcement powers it proposed were weak and would fail to keep errant countries in line. Under the guidance of Germany's chancellor, Angela Merkel, Brussels has drafted a tighter pact that would allow the courts to punish a country that refuses to implement a balanced budget rule in its national law with a penalty of up to 0.1% of GDP. Every EU country except Britain is expected to sign off on the pact when leaders meet at a summit on 30 January.
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3 comments:
"The eurozone remains in danger".
Surprise, surprise!
It’s been weeks of repeated last minute crises and deadlines, with financial apocalypse and economic Armageddon threatened every few days with almost religious fervour by those apostles of Eurozone doom.
But did anyone really think banks and financiers were going to drop themselves and the rest of us suckers they depend on in the mire? Of course not. Although things have gotten very mucky in capitalism’s backyards of late, they have, of course, just been running hyped-up scare-stories to milk the credit crunch crash thing for as big a bunch of bailouts as possible.
"You can slide further on bullshit, than you can on concrete."
The doom mongers are out in force. The British Prime Minister, David Cameron, has dramatically stated that European authorities have “just a matter of weeks” to avert economic disaster. In fact, the crisis has, however haltingly, put Europe’s policy makers on the road to fixing this problem, if politics does not supersede and get in the way. Letting Greece default won’t end Europe’s crisis and won’t allow Germany and other core nations to brush themselves off and move merrily on their way. A Greek default would bring down the country’s banking system now if Greece have a positive outcome these negotiations Greece could reduce its debt by selling assets and changing its tax and expenditure systems. Now stop people should stop their doom mongering and let Greece breath!
have been worried about the European debt crisis but now that the Greeks have fixed their economy in difficult negotiations, Greece will be OK and things can go back to the normal status quo. My only concern is that in the article the Guardian quotes only politicians, no bankers or hedge fund investors. I would feel a little more comfortable if I knew that they see it the same way.
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