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Merkel waiting for Greek 'action' on bailout

The Local · 3 Nov 2011, 20:02

Published: 03 Nov 2011 20:02 GMT+01:00

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"For us, it's actions that count," Merkel said after statements by Greek Prime Minister George Papandreou that he was ready to drop plans to hold a referendum that had enraged eurozone partners.

"What's important is that there is a quick 'Yes' to the October 27 decisions," she added, referring to last week's offer by eurozone leaders to write down Greek debt in exchange for imposing strict fiscal controls.

Merkel said what she and French President Nicolas Sarkozy told Papandreou at crisis talks on Wednesday remained in force. "The sixth (loan) won't be released if Greece doesn't accept" the bailout plan, she said.

Greece needs the next €8-billion slice ($11-billion) of aid by mid-December or faces the possibility of a messy default on its debt. Papandreou's shock referendum announcement threw into doubt Europe's plan to contain its debt crisis and roiled markets.

The October 27 package provides for writing off some €100 billion of Greece's debt. It will also get another €100 billion in rescue loans, but have to continue to implement difficult austerity measures.

France, Italy, the United States and the EU Commission want the European Central Bank to do more to solve the eurozone debt crisis but Germany is opposed to the idea, according to a newspaper report released Thursday.

The daily Die Welt, in a pre-release of an article to be published in its Friday edition, said that at the G20 meeting, Paris, Rome, Washington and Brussels wanted the ECB to act more like its US counterpart, the Federal Reserve, and buy up bonds of debt-wracked countries on the primary markets.

So far, the limited purchases by the ECB have been on the secondary markets only, in an attempt to help ease the borrowing costs of the most indebted countries struggling to raise fresh funding.

Germany, for its part, is opposed to such a proposal, because it believes it would be tantamount to the ECB printing money to finance a country's debt, the newspaper said.

"The ECB isn't a Fed and not a Bank of England ... and the US way to more 'firepower' is a way we cannot pursue in Europe," a German government source said, following discussions ahead of the G20 summit in Cannes.

Story continues below…

The way we see the role of the ECB in Europe, and especially in Germany, is maybe not shared all over the world but is accepted everywhere because that is the way it is," the source said.

AFP/The Local/mry

The Local (news@thelocal.de)

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Your comments about this article

20:19 November 3, 2011 by Englishted
Today is the day that the E.U. finally achieved it's aim of making democracy a thing of the past in Europe.

Took till 2011 not 1984 but you were close George.
21:20 November 3, 2011 by catjones
Englishted,,,,actually in a democracy officials are elected to run the government. If all decisions were put to a referendum (as you imply), you'd end up with an abbreviated California.
21:25 November 3, 2011 by melbournite
Actually the word and the original spirit is "rule of the common people". What we have at the moment is the opposite. A media manipulated circus once every 4 or 5 years and they ignore us the rest of the time
22:42 November 3, 2011 by Lachner
Here's a brief summary of the EU/Greece/IMF chaos:

Greece joined the EU in the year 2000 and they begin taking up on debt due to their new found credit line from the EU/IMF and their shiny AAA-Credit rating. They take up to 147% of their GDP in debt and the politicians mishandle the funds. In 2008 the Financial Crisis blows up which spins the entire global financial system into chaos and Greece goes into a recession in 2009 due to their huge budget deficit. They receive a bailout from the EU and a strict set of measures to follow, but it was not enough to change their issues and now they need another bail-out package. The EU now offers to slash €100B of the total debt and offers an additional €130B to cover the budget deficit. Nonetheless, now the people of Greece are fed up with debt, the EU, the IMF, Germany, France and the ECB so they want the economy to default then take the creditors to court to avoid paying the debt, leave the EU and adopt the Drachma currency. The EU members do not want Greece to default because €81B of the debt is being held by commercial banks, €45B by the European Central Bank, €65B by the EU/IMF and €159B by other investors (asset managers, sovereign wealth funds and central banks around the World). Also, the EU does not want Greece to default and leave the EU because this could spark similar debt default and EU exile actions by the other members of the PIIGS countries. In the case of France and Germany, they particularly don't want Greece to default because France holds about €91B in Greek bonds and Germany also has a considerable chunk but also desperately needs a weak Euro currency to be able to export massively to Asia, North America and the emerging BRIC countries. Without the Euro, the Germans would have to adopt again the Deutsche Mark, which would be too expensive right now given the strength and stability of the German economy. Therefore, German products would be too expensive to buy abroad and exports would plummet. The Greeks are now calling the Germans Nazis because they believe they are taking over their country by suffocating them with debt and demanding Greece to implement strict austerity measures to curtail the deficit. They also argue that it is all a huge conspiracy by Germans to take over the large offshore oil reserves in the Aegean Sea.

I think that no matter what happens, there are conclusions that can be easily made: 1) Greece will eventually default, 2) they will not pay their debt, 3) the time of the Euro and possibly the EU is set to expire soon, and 4) the US Financial System and the American Government are jumping in joy because the dollar will be king again.

Capitalism...isn't it great.
23:06 November 3, 2011 by finanzdoktor
Question to ponder: Why didn't Prime Minister Paprandreou mention the possibility of asking for a national referendum last week, during the negiotations? Why wait until the package is approved, and then three days later, say there will be a referendum? Seems like a lack of foresight on him and his Cabinet. Of course, given the deceptive statistics which hid the true state of the Greek financial picture, what are we to expect.

If a private concern or entity had done this, it would have been called fraud, and charged/prosecuted. Instead, we are bending over backwards to help them, and only now seem to be putting our foot down.
23:29 November 3, 2011 by derExDeutsche
@ FinanzDoktor

Please stay on topic. Capitalism is the problem. Greece wouldn't be in this problem if it were not for the Fox News, Republicans and Capitalism. A European Government can do no wrong @thelocal. Please contact Puffington Post if you require reeducating. Thank you.
12:13 November 4, 2011 by melbournite
@ FinanzDoktor

Its because of what happened in Thessalonika last Friday during the parade to honour resistance against the NAZI's during WWII. The politicians were harrassed by huge angry protests berating them as traitors. They learnt the hard way that there is only so far you can cut people's salaries and push them around until you reach the point of rebellion. If Merkel and Sarkozy think that people wont stand up for their rights at some stage then they'll probably go the same way as Marie Antionette and Louis 16th
14:46 November 4, 2011 by Englishted

So which of the people threatening to throw Greece out of the E.U. was elected by the Greeks ?.

Come to that how many people living within Europe could name their personal (as area representative) know I can't ,any also don't know how to contact him/she with problems I may have concerning the E.U.
15:52 November 4, 2011 by SchwabHallRocks
What rights do Greece¦#39;s citizens have, particularly government employees, when they are being paid (social security, welfare, salaries) with money borrowed from French, German, and other banks and companies?

I would love to borrow money from many of you letter writer¦#39;s knowing that ¦quot;my rights¦quot; to not pay you back would be protected.

I¦#39;m looking for a new car… Please contact me with your terms to loan me 100,000 euro… not that it matters because I¦#39;m not going to pay back. I¦#39;ll have a shiny new BMW and you can be called a Nazi. Fair trade.
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