Eurozone leaders rush to do a second bailout for Greece

Eurozone leaders rush to do a second bailout for Greece

The Greek debt crisis is getting worse and it’s putting a lot of pressure on the Eurozone to end the said crisis to be discussed in a summit on Thursday. Deliberations between senior officials from finance ministries are scheduled to happen Monday and Wednesday in an effort to come up with a deal in time for the summit.

It is made clear that an outcome is needed to be presented on the table by Thursday according to German Chancellor Angela Merkel after forcing EU president Herman Van Rompuy to cancel the meeting last Friday. Last week was a very turbulent one wherein the euro and global stock markets fell while the borrowing costs of Italy and Spain soared to euro-era record levels amid debt contagion fears.

However, spokesman Steffen Seibert is being optimistic regarding the search for an outcome on Thursday’s summit and he said, “The government is working on all levels with all its strength on preparing for Thursday a good result, a decent result, a result that sends out a strong and clear signal to the markets.”

A disagreement between Berlin and the European Central Bank together with other eurozone nations rose due to the former’s insistence on making the private sector share the pain in a new bailout, even if it means causing a Greek debt default. Meanwhile, ECB president Jean-Claude Trichet told the Financial Times Deutschland on Monday that,  "The governments have been warned, if a country defaults, we will no longer be able to accept its defaulted government bonds as normal eligible collateral."

The French Budget Minister, Valerie Pecresse confirmed that all options are being explored so that the eurozone won’t lose its investors.

Greece needs another bailout aside from the first one done in May 2010 by the EU and International Monetary Fund with a package worth 110 billion Euros or $160 billion to stabilize its public finances.

Posted by James Fried on Thursday July 21 2011, 5:36 AM EST. Ref: CNN. All trademarks acknowledged. Filed under Featured News, World. Comments and Trackbacks closed. Follow responses: RSS 2.0