03.11, 10:50 The G20 group of major world economies is meeting in France at a calamitous time for the euro. The eurozone is cracking at the seams, after Greece's shock announcement that it is to hold a referendum on the crucial EU bailout.
27.10, 18:42 The EU summit “was a water pistol rather than a bazooka” in solving the financial troubles of the union, as banks writing off half Greece’s debt is but a very short term measure, says Johan Van Overtveldt of the business magazines Trends and Knack.
Eurozone crisis
27.10, 10:15 European banks agreed early on Thursday to write off 50 per cent of Greek debt. The deal was reached during an emergency summit in Brussels overnight. The EU and the IMF will also give the country another one hundred billion euros in rescue loans.
Eurozone crisis
02.11, 00:03 Greek Prime Minister George Papandreou has stunned the EU by calling a national referendum on the latest bailout deal to the economy. This might be the only way for the Greek government to restore its legitimacy, argues economist James Meadway.
Eurozone crisis
02.11, 23:34 In Cannes Greek PM George Papandreou has been summoned by French President Nicolas Sarkozy and German Chancellor Angela Merkel ahead of the global summit for emergency talks over the proposed bailout referendum in Greece.
Eurozone crisis //Published: 03 November, 2011, 17:47
Edited: 04 November, 2011, 01:45
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Greek Prime Minister George Papandreou has scrapped his plan for a referendum on the EU bailout package. Earlier he denied rumors of his possible resignation.
During his speech in parliament on Thursday he warned that early elections would be “catastrophic”, entailing a high risk of bankruptcy and even lead to an exit from the euro.
The confidence vote for the government is expected on Friday.
He also invited the opposition join the debt-deal negotiations.
“If the opposition is willing to negotiate, we could ratify the eurozone bailout deal”, he is quoted as saying by AP.
The Greek finance minister, Evangelos Venizelos, also confirmed that the country will not be holding a referendum.
Papandreou came under growing pressure to resign after calling a referendum. His finance minister, Evangelos Venizelos, declared on Thursday he was against that move. At first he supported Papandreou’s decision, but changed his mind after his and the PM’s meeting with French President Nicolas Sarkozy and German Chancellor Angela Merkel. On the eve of the G20 emergency talks on Wednesday, the top Greek officials were summoned by the eurozone’s two most-powerful politicians as well as the IMF and ECB. The message they wanted to deliver was that his country needs to play by EU rules or leave the eurozone.
Earlier, some parties who dislike the idea of a referendum demanded that a coalition government be formed. That idea came from several deputies of the country’s ruling PASOK socialist party. Similar claims came from conservative Opposition Leader Antonis Samaras. He insists on the formation of a transition government and the immediate ratification by parliament of the new eurozone debt agreement.
The referendum in Greece over the 130-billion-euro bailout program to relieve the country’s finances sparked concern across the eurozone that banks will not restructure the Greek debt until the results of the ballot emerge. This has sent the eurozone into weeks of financial uncertainty, with markets deflating.
In spite of the chaos in the markets for the past couple of days, this Greek gamble on the referendum seems to have yielded a positive result, says Thomas Thygesen, chief strategist at SEB Merchant Banking.
“I think the important thing here is that it looks like you are going to get both sides of the Greek political spectrum onboard for the agreement with the EU – that is what was needed for credibility.”
This could have been achieved with a referendum, but if now it ends up in a political deal with the same result, Goodman believes it’s clearly positive – at least in the short-term.
While some doubt that it’s wise of European leaders to try to keep Greece in the eurozone, Thygesen argues that even if it’s probably true that the country shouldn’t have joined in the first place, now there are two reasons to keep them in.
“[The EU] is obviously some kind of long-term nation-building project – you wouldn’t kick New York or Kansas out of the US just for some kind of financial misbehavior. If you want to keep this thing together for the long term, you’ve got to show some kind of solidarity.”
03.11, 17:12 The Syrian government has agreed to an Arab League peace plan to end almost eight months of unrest that has left scores dead. However, with the opposition against any initiative that would leave Assad in power, the country remains as divided as ever.
Syria unrest
03.11, 18:31 Not giving up – convicted Russian arms dealer Viktor Bout’s family are determined to continue fighting for justice until they see him out of prison. Russian authorities promise to back them.
Viktor Bout case
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