Greek bailout
July 16, 2011
Eurozone leaders will meet for a snap summit in Brussels on Thursday, July 21, in the hopes of thrashing out Greek's debt crisis, European Council President Herman Van Rompuy said.
"Our agenda will be the financial stability of the euro area as a whole and the future financing of the Greek program," Van Rompuy worte on Friday, July 15, in a message on Twitter.
Greece received a 110-billion-euro ($155-billion) bailout last year from the European Union and the International Monetary Fund, but the country now needs another package of similar size if it is to remain solvent beyond 2012.
German expectations
Division over how to approach a new Greek bailout has kept eurozone leaders at loggerheads, and even made it difficult to fix a day for the meeting.
The German government said it presumed Van Rompuy's call for the summit signaled his confidence that a solution was within reach.
"We presume Van Rompuy has issued the invitation trusting there will be a solution for Greece by then," a government spokeswoman said, adding that Chancellor Angela Merkel would be in attendance at the meeting on July 21.
Germany's Foreign Minister said he expected a "clear pro-European signal" from the meeting.
Merkel had insisted earlier this week, when a meeting for last Friday was suggested, that no summit should take place until an agreement had been found.
Still no plan
Germany, faced with taxpayers concerned that they will have to foot the massive bill, has led the Netherlands and Finland in demanding that private lenders pay for at least some of the new package. However, no agreement has been reached as to how to enlist private investors willingly.
Belgian Finance Minister Didier Reynders said he was also in favor of banks contributing to the pot, but warned that any private-sector participation must be entirely voluntary.
The European Central Bank (ECB) has warned that pressuring lending from private investors could trigger a disastrous default.
The ECB has likewise cautioned against several eurozone governments' suggestion to allow Greece to default for a time.
Another suggestion has been to have the eurozone's bailout fund, the European Financial Stability Fund, lend Greece money to allow it to buy back some of its debt at reduced prices.
The crisis threatens to affect the entire eurozone. Markets have reacted to the currency bloc's insecurity, with the euro dipping below $1.40 this week for the first time in four months.
Investors are meanwhile demanding higher risk premiums on Italian and Spanish debt, raising speculation the two countries could follow in the footsteps of bailed-out Greece, Ireland and Portugal.
Author: David Levitz (AFP, dpa, Reuters)
Editor: Toma Tasovac