Saturday, March 13, 2010

Greece Bailout Ping-Pong, No Deal Underway; Pension Promises Add To Greek Debt Woes; How Does Greece Compare To US?

On March 12 the Guardian reported Greece debt: EU agrees bailout deal http://www.guardian.co.uk/world/2010/ma ... ce-bailout

Exclusive: Germany plays pivotal role in potential eurozone rescue package for Greek debts

The eurozone has agreed a multibillion-euro bailout for Greece as part of a package to shore up the single currency after weeks of crisis, the Guardian has learnt.

Senior sources in Brussels said that Berlin had bowed to the bailout agreement despite huge resistance in Germany and that the finance ministers of the "eurozone" – the 16 member states including Greece who use the euro – are to finalise the rescue package on Monday. The single currency's rulebook will also be rewritten to enforce greater fiscal discipline among members.

The member states have agreed on "co-ordinated bilateral contributions" in the form of loans or loan guarantees to Greece if Athens finds itself unable to refinance its soaring debt and requests help from the EU, a senior European commission official said.

Other sources said the aid could rise to €25bn (£22.6bn), although it is estimated in European capitals that Greece could need up to €55bn by the end of the year.

EU Bonds For Greece Rescue

Also on March 12 Bloomberg reported EU Said to Discuss EU Bonds to Fund Any Greek Rescue. http://www.bloomberg.com/apps/news?pid= ... nP.g&pos=4

European Union finance ministers will discuss next week whether any Greek bailout should be funded by EU bonds guaranteed by euro region governments, said three people briefed on preparations for March 15-16 meetings.

Another option would be for governments in the 16-nation euro region to give Greece loans to help the country finance its budget deficit, said the people, who spoke on condition of anonymity because the talks are private. Any EU bond sale would have to be agreed upon by all 27 EU nations, they said. Ministers from countries using the euro meet in Brussels on March 15 and will be joined by the rest of the EU the next day.

EU leaders have signaled they may offer Greece financial assistance if necessary, though German Chancellor Angela Merkel has so far refused to publicly give the green light for any such aid.

The German government has dropped its opposition to a bailout, paving the way for the EU to approve the plan to aid Greece at the Brussels meeting on March 15, the Guardian newspaper in London reported. Aid to Greece through the loans could reach 25 billion euros ($35 billion), the newspaper said.

Elmar Brok, a member of Merkel’s Christian Democrats in the European Parliament, said there is “unity in the euro group on finalizing a package that can be used to help Greece.â€