EU Summit: “In Greeks We Trust”

• March 28th, 2010
• Posted by EUEditor

European Heads of Government meeting in Brussels (25-26.3.10) have approved a stand-by formula to support efforts by Greece to handle its debt crisis, involving both the IMF and EU member states.

The arrangement worked out by government leaders from France and Germany will see the 16 member countries of the Eurozone – those using the Euro currency – guarantee some   €45-billion (A$66.7-billion, dcerates.com, 28.3.10), if needed, with the International Monetary Fund providing a further  €10-20-billion (A$14.8- 29.6-billion).

The move had the desired outcome, an early reduction in interest rates being charged on Greek government bonds

The German Chancellor,  Angela Merkel , said it had a broader impact also as it “did something for the stability of the Euro” – producing a rise in the value of the currency on markets against the British and United States currencies.

The Greek government has begun to implement an austerity policy to reduce the impacts of heavy deficits, undermining its credit worthiness, as public borrowings come due.

Its efforts to bring spending within parameters agreed to by Eurozone states, are being watched closely as other national exchequers using the EU currency  – notably Portugal,  Spain and to an extent Italy – have been under similar pressure.

The Heads of Government persisted with a line that guarantee funds, while now available to be made available, have not been called upon:

“We fully support the efforts of the Greek government … which are sufficient to safeguard the 2010 budgetary targets”, they said.

“ We recognise that the Greek authorities have taken ambitious and decisive action which should allow Greece to regain the full confidence of the markets.

“The consolidation measures taken by Greece are an important contribution to enhancing fiscal sustainability and market confidence. The Greek government has not requested any financial support.”

Reference

Gavin Hewitt, “The relief of Athens: eurozone rides to Greece’s rescue”, BBC News, London, 26.3.10. http://www.bbc.co.uk/blogs/thereporters/gavinhewitt/, (28.3.10).

BBC News, London, “Merkel praises Eurozone deal to help Greece”, 26.3.10. www.bbc.co.uk/ …, (28.3.10).

European Council, Brussels, Media Release, “Strategy for employment and growth”, 26.3.10. http://www.european-council.europa.eu/home-page/highlights/forthcoming-spring-summit.aspx?lang=en, (28.3.10).

European Council, Brussels, “Statement by the Heads of State and Government of the Euro area”, 25.3.10. http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/113563.pdf, (28.3.10).

Picture

Attending Brussels summit, left to right, Nicolas Sarkozy, French President; Jose Luis Zapatero, Spanish PM and meeting Chairman; George Papandreou, Greek PM; Angela Merkel, German Chancellor. (European Council).

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