News Column

Fight Looms on Greek Euro Delay

Nov. 19, 2012

Dan Atkinson, Financial Mail on Sunday, London

euro notes on edge

The explosive issue of who will pay for a two-year extension to Greece's deficit-reduction programme will confront eurozone finance ministers on Tuesday.

Between 20 and 40 billion euros (pounds sterling 16 billion to pounds sterling 32 billion) will be needed to fund Greece after the target date for its cuts programme was put back to 2016. But it is unclear where the money will come from.

The extension is seen as vital to keeping Greece in the single currency, so markets will carefully scrutinise statements coming out of Tuesday's meeting in Brussels.

"It is a burning question," said Dhaval Joshi, managing editor with independent research group BCA. "And there is an even more vital issue, which is that Greek debt is still unsustainable and needs another restructuring to get it below 100 per cent of gross domestic product." It stands at 175 per cent and is scheduled to fall to 120 per cent by 2020.

Raoul Ruparel of the campaign group Open Europe said: "There are big political discussions about how to find the money."

The eurozone has been rocked by strikes and protests, with people in Spain, Portugal, Greece and Italy opposing austerity measures.


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Source: (c)2012 Daily Mail (London) Distributed by MCT Information Services


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