London – After days of skyrocketing alarm among investors, the leaders of Europe's two heavyweights, France and Germany, reached agreement Friday on a key element of a second rescue package to help debt-ridden Greece avert a potentially catastrophic default.
Meeting in Berlin, German Chancellor Angela Merkel and French President Nicolas Sarkozy appeared to resolve a running dispute over whether to force private holders of Greek bonds to participate in the bailout, which many are loath to do. The two leaders agreed that such investors would take part only on a voluntary basis.
European markets, which had been hammered over the past few days out of concern over Greece, immediately rose on the news of a rapprochement between Merkel and Sarkozy and on the back of a shakeup of the government in Athens.
Investors have been worried that Greek Prime Minister George Papandreou will be unable to win parliamentary approval for a new round of austerity cuts to bring down his nation's massive budget deficit. That and European infighting over whether to extend more emergency aid to Athens fueled market fears this week that Greece would slide into bankruptcy.
Huge public protests in Athens against the austerity package have also shaken investor confidence.
In a reshuffle of his Cabinet on Friday, Papandreou booted his unpopular finance minister and appointed in his place a powerful fellow Socialist Party member who analysts say is capable of delivering the votes in parliament that Papandreou needs.
“The country must be saved and will be saved,” new Greek Finance Minister Evangelos Venizelos told reporters, adding that he accepted the post as his “patriotic duty.”
Papandreou will present his new ministerial lineup for a vote of confidence in the parliament next week.
In Germany, Merkel appeared to back down from her insistence that private holders of Greek debt be forced to participate in a second bailout of the Mediterranean nation by extending the maturities on their bonds. Many Germans believe that such investors should not be given a free pass in the crisis while taxpayers are on the hook to rescue Athens.
But the idea has drawn sharp opposition from the European Central Bank and countries such as France, which fear that ratings agencies would see forced participation as tantamount to a default by Greece. That, in turn, could trigger a worldwide financial crisis.
Merkel and Sarkozy agreed instead on a “softer” option that would see private bondholders take part of their own volition – for example, by maintaining their exposure to Greek debt after their current bonds come due.
The agreement between the European Union's two most influential nations helps pave the way for approval of a new EU bailout package for Greece in July, just in time for a fresh infusion of cash for Athens to pay bills about to come due.
“The quicker we get a solution the better,” Merkel said.
© 2011 McClatchy-Tribune Information Services
Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
Last week, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy