Graffiti by Absent
Eurozone leaders will meet in Brussels on Thursday for an emergency summit whose main aim will be to agree on a second bailout package for debt-burdened Greece as it becomes increasingly obvious that the current system of providing interest-bearing loans to Athens in return for austerity measures and structural reforms is not viable for much longer.
The summit is shaping up as a pivotal moment in the single currency’s history because in attempting to address the Greek situation, eurozone leaders are set to adopt unprecedented measures that could pave the way for a much more radical and comprehensive approach to the debt crisis.
Posted in Economy, Greece
Tagged Barry Eichengreen, Bundesbank, Daniel Gros, ECB, EFSF, euro, European Central Bank, European Union, eurozone, Giulio Tremonti, Greece, Greece bond buyback, Greek bonds, Greek crisis, Greek debt, Greek debt crisis, IMF, International Monetary Fund, Jens Weidmann, Lorenzo Bini Smaghi, New Deal for Europe, New Marshall Plan, Yiannis Varoufakis
Ilustration by Manos Symeonakis
When French President Nicolas Sarkozy announced two weeks ago that French banks had agreed to participate in a rollover of Greek debt, it seemed a rare moment of relief in the country’s strained efforts to tackle its fiscal crisis. “The idea is that we won’t let down Greece and that we’ll defend the euro, which is in the interest of us all,” said Sarkozy, reflecting a sense of purpose and unity that the European Union has often lacked over the last 18 months.
However, the French proposal — which we will come to — soared briefly on the wings of hope before crashing into the immovable obstacle of reality. Two days of talks between bankers and insurers last week led to the Paris blueprint largely being discarded. However, the rejection of the French scheme appears to have helped Greece dodge a debt bullet. The more experts scrutinized the French plan, the more they realized it was a seriously flawed proposal that would worsen Greece’s debt problems.
Posted in Economy, European Union, Greece
Tagged Bloomberg, BNP Paribas, Charles Dallara, debt rollover, ECB, EFSF, EU, European Central Bank, European Union, eurozone, Financial Times, French banks, Greece, Greece bond buyback, Greece default, Greek bonds, Greek crisis, Greek debt, IIF, Jans Kees de Jager, Nicolas Sarkozy