News / Europe

Europe Scrambling to Complete Debt-Relief Plan

A man walks behind screens showing a graph of stocks at the Athens Stock Exchange, in Athens, October 24, 2011.
A man walks behind screens showing a graph of stocks at the Athens Stock Exchange, in Athens, October 24, 2011.

With 24 hours to go before another summit, European leaders were scrambling Tuesday to complete a plan to resolve the continent's governmental debt contagion.

The outline of a package of reforms is emerging, but details have yet to be set. The plan calls for European banks to forgive billions of dollars of debt for Greece and sharply increase their own cash reserves. At the same time, the size of the continent's bailout fund would be boosted to assist other debt-ridden countries in the future.

The European heads of state have promised a debt-relief plan by Wednesday when they meet in Brussels for their second summit in four days to try to resolve the two-year-old crisis.

World financial markets have been roiled in recent weeks as the continent's officials have moved slowly in their efforts to keep Greece from defaulting on its international obligations. The European leaders are also trying to keep the debt crisis from spreading to bigger economies in Italy and Spain, and sending world economies into a tailspin.

Greek Prime Minister George Papandreou called the impending decisions "a critical time," requiring European leaders to "remain clear-headed and calm."

Reaching agreement on the plan has proved difficult.

European leaders want banks holding Greek debt to write off as much as 60 percent of the money they are owed, nearly three times the amount they agreed to in July when Greece's second bailout in two years was approved. The banks, however, are only offering to assume losses of 40 percent.  A middle-ground 50 percent loss would amount to about $243 billion.

While agreeing to bigger losses, the banks would also be required to increase their cash reserves next year by about $139 billion. But the exact timing of the requirement remains in question.

The European leaders are also calling for an increase in the $596 billion bailout fund for the bloc of 17 nations that use the common euro currency. It could be increased to nearly $1.4 trillion, without requiring European governments to provide more money. Instead, they hope to craft a plan to insure against possible future losses in hopes of attracting new capital from private investors and countries like China that have cash to invest.

While the immediate focus has been on debt-ridden Greece, German Chancellor Angela Merkel and French President Nicolas Sarkozy are pressing Italian Prime Minister Silvio Berlusconi to move faster to adopt new economic reforms to stave off the need for an Italian bailout.

Berlusconi has started emergency negotiations to try to raise Italy's retirement age from 65 to 67, but so far has been unable to convince his Northern League political partner to go along with the change.

Some information for this report was provided by AP, AFP and Reuters.

You May Like

China Announces Corruption Probe into Senior Ex-Leader

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, being probed for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership 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.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid