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

Video Miami Cubans Divided on New US Policy

While older, more conservative Cuban Americans have promoted anti-Castro political movement for years, younger generations say economically, it is time for change More

2014 Sees Dramatic Uptick in Boko Haram Abductions

Militants suspected in latest mass kidnapping of over 100 people in Gumsuri, Nigeria on Sunday More

Video Cuba Deal Is Major Victory for Pope

Role of Francis hailed throughout US, Latin America - though some Cuban-American Catholics have mixed feelings 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.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.