News / Europe

Eurozone Finance Ministers Launch Bailout Fund

President of the European Central Bank Mario Draghi, left, listens to European Commissioner for Economic and Monetary Affairs Olli Rehn, during the Eurogroup meeting, in Luxembourg, October 8, 2012.
President of the European Central Bank Mario Draghi, left, listens to European Commissioner for Economic and Monetary Affairs Olli Rehn, during the Eurogroup meeting, in Luxembourg, October 8, 2012.
Lisa Bryant
— Europe's new bailout fund is being unveiled as finance ministers from the 17-nation eurozone meet in Luxembourg, amid more gloomy indicators about Europe's economic health. Officially called the European Stability Mechanism, the new $653-billion rescue fund aims to offer a financial buffer for ailing eurozone economies like Greece and Spain. It follows September's announcement by the European Central Bank of a bond-buying plan to ease the longstanding eurozone debt crisis.

At a press conference last week, ECB chief Mario Draghi sounded a cautiously upbeat note about progress made by European governments to tackle their financial problems.

"You can see this progress all across the board, both as far as fiscal consolidation is concerned, as far as structural reforms are concerned," he said,"and as far as reposing some of the flaws of the banking sector."

But London-based Center for European Reform's chief economist Simon Tilford is more pessimistic.

"It is hard to be optimistic about a region as heavily indebted as Europe, or Western Europe, when the region's economy is [heading] into a very deep slump," said Tilford. "So any sort of optimism we see at the moment is likely to prove very short lived."

The new, permanent bailout fund will be used to help the most indebted eurozone economies get back on their feet in return for tough austerity measures. It is part of a larger European Union integration effort that finance ministers will discuss in their two-day meeting in Luxembourg. But while European officials hail its creation, analyst Tilford doubts whether the fund will have much effect.

"I know it sounds like a lot of money, but in the context of the eurozone economy, in the context of an economic crisis of this magnitude, these sums are really quite small," he said. "Also, the problem with this is that there are only so many countries that are able to underwrite these bailout funds, these debts."

A pensioner shouts slogans during an anti-austerity protest in front of the EU headquarters in Athens, October 8, 2012.A pensioner shouts slogans during an anti-austerity protest in front of the EU headquarters in Athens, October 8, 2012.
x
A pensioner shouts slogans during an anti-austerity protest in front of the EU headquarters in Athens, October 8, 2012.
A pensioner shouts slogans during an anti-austerity protest in front of the EU headquarters in Athens, October 8, 2012.
And as more Eurozone countries face economic problems, Tilford says, fewer are left to bail out the others.

On Tuesday, German Chancellor Angela Merkel will be in Greece, which says its coffers may soon be empty without another bailout installment. Meanwhile, reports suggest Madrid is unlikely to ask for a bailout in the immediate future. As the eurozone's fourth-largest economy, Spain is a much bigger worry than Greece.

The eurozone was hit with more bad news last week, with reports showing it had likely slipped into recession and showing August unemployment reaching a record 11.4 percent.

You May Like

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level 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.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid