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EU eyes lower rates for Greece

Monday, May 09, 2011 - 02:20

May 9 - The European Union is under pressure to renegotiate Greece and Ireland's financial bailouts, after revelations that Greece won't be able to fulfill the current terms of its rescue package. Joanna Partridge reports.

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TV AND WEB RESTRICTIONS~**NONE*~ Hospital workers were the latest to stage a walk-out in Greece. They took to the streets of Athens to protest unpaid wages and unpopular healthcare reforms. A year since Greece received a 110 billion euro bailout from the EU and the IMF, the country has been forcing through highly unpopular reforms to tackle its debt crisis. Despite tax hikes and spending cuts, low tax revenues due to the recession have prevented Greece from cutting its budget deficit as quickly as hoped. A report by Germany's Der Spiegel magazine that Greece could leave the euro zone rattled investors on Friday - with the euro falling one percent against the dollar - even though Athens strenously denied the story. And investors worried too about a meeting of ministers from the euro zone's biggest economies, also attended by Greek Finance Minister George Papaconstantinou: SOUNDBITE: Greek Finance Minister George Papaconstantinou, saying (English): "The meeting was in context of informal meetings that he has with members of the Eurogroup that are part of the G20. Were it not for the absolutely ridiculous claims in a German magazine regarding Greece supposedly asking to exit the euro, this meeting would not have attracted any attention." Financial markets have been sceptical for weeks whether Greece will be able to maintain its bailout repayments without restructuring. Adam Myers from Credit Agricole CIB is convinced Greece can't handle its debt as it stands. SOUNDBITE: Adam Myers, Senior Market Strategist, Credit Agricole CIB, saying (English): "There will be some form of restructuring, or using the more correct term, default, over the next year. Whilst there is political will to avoid that sort of restructuring, the rebalancing of the books in terms of the accounting and the actual numbers required are just too significant to not require some form of elongation of the prepayment period at the very least." These concerns about a Greek default once again led to falls on European stocks exchanges on Monday. And if Greece is given any concessions, Ireland has said it will call for better terms on its bailout. That prospect could further unsettle the markets and mean the European Union is paying out aid for many years to come. Joanna Partridge, Reuters

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EU eyes lower rates for Greece

Monday, May 09, 2011 - 02:20