Europe turns towards IMF fix for Greece
Saturday, 20 March 2010
BRUSSELS, March 19 (AFP): The euro fell sharply Friday as the European Commission pressed EU member states to approve financial aid pledges for debt-laden Greece amid a shift toward IMF intervention in the crisis.
Days from a European Union summit, Germany officially declared its openness to an IMF appeal, an unprecedented move by a eurozone country, while the Netherlands and Finland also diverged from a pact reached just days ago.
Investors reacted negatively to the shifting political sands, with Greek government bond yields -- the interest rate that Athens must pay in order to raise money on financial markets -- rising sharply.
The EU's budgetary overlord, Olli Rehn, said national leaders had to come to a "specific political conclusion" and clarify the way forward "next week," having compared notes with IMF chief Dominique Strauss-Kahn, who has been in town for days.
Greek Prime Minister George Papandreou used a two-day visit of his own to push heavily for national leaders to help his country borrow more cheaply when they gather in Brussels next Thursday and Friday.
Greece has made it clear that it could not meet its borrowing requirements at current rates while at the same time adhering to strict EU demands to slash its huge public deficit.
In a pointed sign, a diplomatic source said it was unlikely that EU president Herman Van Rompuy would find sufficient support to place the Greek troubles on the formal summit agenda.
"The German government does not rule out aid from the IMF if Greece requests it," spokesman Ulrich Wilhelm said at a news conference after reports that Berlin was concerned European aid for Greece could break German and EU law.
Days from a European Union summit, Germany officially declared its openness to an IMF appeal, an unprecedented move by a eurozone country, while the Netherlands and Finland also diverged from a pact reached just days ago.
Investors reacted negatively to the shifting political sands, with Greek government bond yields -- the interest rate that Athens must pay in order to raise money on financial markets -- rising sharply.
The EU's budgetary overlord, Olli Rehn, said national leaders had to come to a "specific political conclusion" and clarify the way forward "next week," having compared notes with IMF chief Dominique Strauss-Kahn, who has been in town for days.
Greek Prime Minister George Papandreou used a two-day visit of his own to push heavily for national leaders to help his country borrow more cheaply when they gather in Brussels next Thursday and Friday.
Greece has made it clear that it could not meet its borrowing requirements at current rates while at the same time adhering to strict EU demands to slash its huge public deficit.
In a pointed sign, a diplomatic source said it was unlikely that EU president Herman Van Rompuy would find sufficient support to place the Greek troubles on the formal summit agenda.
"The German government does not rule out aid from the IMF if Greece requests it," spokesman Ulrich Wilhelm said at a news conference after reports that Berlin was concerned European aid for Greece could break German and EU law.