THE TELEGRAPH: Germany and France have agreed a deal to “safeguard financial stability” for Greece and the wider eurozone following crisis talks at a European Union summit.
Political agreement on general principles was thrashed out during tense negotiations between Germany, France, Greece and the European Central Bank on Thursday morning.
”There is an agreement on the Greek situation. We will communicate now the agreement to the other leaders,” Mr Van Rompuy said.
Jose Manuel Barroso, the European Commission President, said that Greece would receive support in return for and aligned to progress on sweeping austerity cuts.
”Greece needs to do whatever is necessary, including additional measures, to ensure that the deficit reduction targets for this year are met,” said an official. ”Secondly, in that case the euro zone members should be ready to safeguard financial stability in the euro zone area as a whole.”
The EU summit was delayed to buy time as Germany and France brokered frantic negotiations with the ECB and Commission to save the eurozone by putting together a rescue package for Greece. >>> Bruno Waterfield in Brussels | Thursday, February 11, 2010
TIMES ONLINE: The leaders of France and Germany agreed today to work together to tackle the Greek debt crisis but failed to reassure jittery European financial markets.
Both the euro and Greek government bonds enjoyed a moment of respite after reports that the new EU President, Herman Van Rompuy, had brokered a bailout deal in a meeting this morning with President Sarkozy, Chancellor Angela Merkel and Jean-Claude Trichet, head of the European Central Bank.
“Euro area member states will take determined and co-ordinated action if needed to safeguard stability in the euro area as a whole," Mr Van Rompuy told reporters in Brussels, reading from a statement agreed by all 16 eurozone states. "The Greek government has not requested any financial support."
But as the EU's 27 leaders went into summit talks this afternoon, the lack of detail began to weigh with market traders looking for action - and hard cash - not words. The euro, which has lost some 10 per cent in value against the dollar since late 2009, initially rose slightly on Mr Van Rompuy's statement to $1.3755 before falling back $1.3688.
"It just looks like a pledge of solidarity, but no actual details of a program which is why the euro is still in the doldrums,” said Neil Mackinnon, global macro strategist at VTB Capital. “Unless, there’s further news out later this afternoon, the markets will consider the EU summit response as a disappointment." >>> Philippe Naughton and David Charter in Brussels | Thursday, February 11, 2010
THE NEW YORK TIMES: BERLIN — As Europe edges toward emergency guarantees to stem market panic over one of the most profligate members of the euro bloc, the country that the region turns to for leadership, Germany, is suffering from growing doubts about the European experiment it long championed.
Reluctant German leaders now find themselves forced to help Greece remain solvent, or risk watching markets attack one weak member after the next, from Portugal to Spain to Italy, threatening the stability of the euro, the European currency Germany fought so hard to create.
On Thursday, European leaders meeting in Belgium announced they had agreed to a political statement to try to reassure bond markets and head off the crisis, and said that finance ministers would work through the details next week.
Earlier, in a conference call with the finance ministers from the 16 countries that use the euro and the president of the European Central Bank, Jean-Claude Trichet, officials said that some action had to be taken to calm markets and take pressure off Greece. It appeared clear that Germany, with an assist from France, would have to take the lead. “The Germans are the only ones with deep pockets,” said Daniel Gros, director of the Center for European Policy Studies in Brussels. “If it was just Greece, they could consider letting them go down the drain, but it threatens the entire euro zone.”
Berlin has been mostly silent on the matter. That is partly to put pressure on Greece, as civil servants struck there Wednesday to oppose cutbacks that the government has promised in order to rein in its enormous budget deficit.
But a bailout will be politically awkward for Chancellor Angela Merkel’s government. It is precisely the financial millstone that opponents warned about when Germany gave up its treasured mark, a move that a majority of people here, in contrast to their political leaders, opposed at the time.
“If the German government would just transfer money to Greece, people in Germany would feel their worst fears had come true,” said Thomas Mayer, chief economist at Deutsche Bank. >>> Nicholas Kulish | Wednesday, February 10, 2010
Watch New York Times video 1: Financial Crisis Deepens in Greece >>>
Watch New York Times video 2: Greeks Strike Amid Financial Crisis >>>
