News / Economy

Europe Scrambles to Contain Debt Problems

French finance minister Francois Baroin, right, listens to U.S. treasury secretary Timothy Geithner, left, during talks in Marseille. Finance Ministers from the Group of Seven leading economies gathered in France amid jitters about Europe's debt crisis a
French finance minister Francois Baroin, right, listens to U.S. treasury secretary Timothy Geithner, left, during talks in Marseille. Finance Ministers from the Group of Seven leading economies gathered in France amid jitters about Europe's debt crisis a

French, German and Greek leaders are scheduled to hold a conference call Wednesday on how to contain Europe's deepening financial crisis that also is triggering alarm in other continents.

The call by leaders of Europe's two largest economies - France and Germany - to its weakest, Greece, underscores deepening worries about the region's financial troubles.

It comes ahead of a Friday meeting by finance ministers from the 17 nations sharing the euro currency to address a debt crisis that began with Greece, Portugal and Ireland, and now risks dragging in Italy and Spain.

U.S. Treasury Secretary Timothy Geithner is attending the talks for the first time, amid signs the crisis might also spread overseas.

In remarks to American news station CNBC, Geithner said European leaders are aware they need to do more to earn international confidence.

Fabian Zuleeg, chief economist at the Brussels-based European Policy Center, says the United States is right to be concerned. "The intervention from the U.S. has also shown, at least a risk that the stability of the financial system as a whole - the global financial system - might be under threat again," he said. "That we might have a financial situation where a possible default of Greece might have knock-on effects around the world as well."

On Wednesday, Italy's lower house approved a new austerity plan that would cut the country's deficit by more than $70 billion over three years. But underscoring market fears, Rome was forced this week to sell bonds at record interest rates.

In another signal of market jitters, the Moody's rating agency downgraded two major French banks that are large holders of Greek government bonds.

Greece is under pressure to make good its austerity promises in return for getting more rescue funds. But analysts believe European governments sharing the euro currency also must agree to closer economic unity if the eurozone is to remain viable.

In remarks before the European Parliament Wednesday, European Commission President Jose Manuel Barroso said the commission will propose creating "eurobonds" as a way for eurozone governments to jointly guarantee their debts.

"I am convinced we need a deeper and more results-driven integration. And let me be clear, this has to be within the community system. A system based purely on intergovernmental cooperation has not worked in the past and will not work in the future," Barroso stated.

Chances that the eurozone might fall apart were once dismissed as unlikely.

Now, analysts like Zuleeg say it's a real possibility. "I don't think a very orderly exit of a single country is a very likely scenario. I think it is much more likely that we either have the eurozone holding together or we get a chaotic process where other countries come under pressure as soon as one of the countries, such as Greece, says they can no longer pay their debt," he said.

Experts say economic growth also is needed for Greece and other debt-strapped nations to rebound.

But last week, the Paris-based Organization for Economic Cooperation and Development downgraded its growth estimates for the euro area and the Greek economy has shrunk this year.

You May Like

Tunnel Bombs Highlight Savagery of Aleppo Fight

Rebels have used tunneling tactic near government buildings, command posts or supply routes to set off explosives; they detonated their largest bomb this week under Syria's intelligence headquarters More

Sierra Leone Launches New Initiative to Stop Ebola Spread

Government hopes Infection and Prevention Control Units, IPC, will help protect patients and healthcare workers More

UN Official: Fight Against Terrorism Must Not Violate Human Rights

UN High Commissioner for Human Rights says efforts by states to combat terrorism are resulting in large scale rights violations against the very citizens they claim to defend More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Video Claims to Show Shia Forces in Iraq Executing Sunni Boyi
X
Jeff Seldin
March 05, 2015 2:36 AM
A graphic mobile phone video is spreading on the Internet, claiming to show Iraqi forces or Shia militia executing a handcuffed Sunni boy. Experts have yet to verify the video, but already Islamic State followers are publicizing it across social media, playing on deep-rooted sectarian fears. VOA’s Jeff Seldin reports.
Video

Video Video Claims to Show Shia Forces in Iraq Executing Sunni Boy

A graphic mobile phone video is spreading on the Internet, claiming to show Iraqi forces or Shia militia executing a handcuffed Sunni boy. Experts have yet to verify the video, but already Islamic State followers are publicizing it across social media, playing on deep-rooted sectarian fears. VOA’s Jeff Seldin reports.
Video

Video Ukrainian Authorities Struggle to Secure a Divided Mariupol

Since last month's cease-fire went into effect, shelling around the port city of Mariupol has decreased, but it is thought pro-Russian separatists remain poised to attack. For the city’s authorities, a major challenge is gaining the trust of residents, while at the same time rooting out informants who are passing sensitive information to the rebels. Patrick Wells reports for VOA.
Video

Video Volunteer Gauge-Watchers Help Fine-Tune Weather Science

An observation system called CoCoRaHS is working to improve weather science, thanks to thousands of volunteers across the country who measure precipitation in their own backyards, then share their data through the Internet. VOA's Shelley Schlender reports.
Video

Video NASA Spacecraft Approaches a Dwarf Planet

NASA’s Dawn spacecraft will make history on Friday, March 6, when it becomes the first man-made object to orbit a dwarf planet named Ceres. It is located in the asteroid belt between Mars and Jupiter, almost 500 million kilometers from Earth. Among other objectives, Dawn will try to examine two mysterious bright white spots detected on the planet’s surface. VOA’s George Putic has more.
Video

Video Young Muslims Radicalized Online

Young Muslims are being radicalized ‘in their bedrooms’ through direct contact with Islamic State or ISIL fighters via the Internet, according to terror experts. There are growing concerns that authorities and Internet providers are not doing enough to counter online extremism - which analysts say is spread by a prolific network of online supporters around the world. Henry Ridgwell reports from London.
Video

Video African Americans Recall 1960s Fight For Voting Rights

U.S. President Barack Obama and thousands of people will gather in the small southern U.S. city of Selma, Alabama, Saturday, March 7 to commemorate the 50th anniversary of a historic voting rights march that became known as “Bloody Sunday." VOA’s Chris Simkins traveled to Alabama and introduces us to some of the foot soldiers of the voting rights struggles of the 1960s.
Video

Video Positive Messaging Transforms Ethiopia's Image

Ethiopia was once known for famine and droughts. Now, headlines more often point to its fast-growing economy and its emergence as a regional peacemaker. How has Addis Ababa changed the narrative? VOA's Marthe van der Wolf reports.
Video

Video Cyber War Rages Between Iran, US

A newly published report indicates Iran and the United States have increased their cyber attacks on each other, even as their top diplomats are working toward an agreement to guarantee Iran does not develop a nuclear weapon and to free Iran from international sanctions. The development is part of a growing global trend. VOA’s Al Pessin reports from London.
Video

Video Answers Elude Families of MH370 Passengers

For the families on board Malaysia Airlines flight MH370, an airline official’s statement nearly one year ago that the plane had lost contact with air traffic control at 2:40 AM is the only thing that remains confirmed. William Ide reports.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.8954
JPY
USD
119.75
GBP
USD
0.6515
CAD
USD
1.2518
INR
USD
61.921

Rates may not be current.