News / Europe

Markets Rise But Questions Remain After Euro Debt Deal

A man walks past an index board at a hall of the Athens Stock Exchange in Athens October 27, 2011. Greek bank stocks jumped more than 13 percent in early morning trade on Thursday after euro zone leaders agreed a new rescue deal for Greece, despite plans
A man walks past an index board at a hall of the Athens Stock Exchange in Athens October 27, 2011. Greek bank stocks jumped more than 13 percent in early morning trade on Thursday after euro zone leaders agreed a new rescue deal for Greece, despite plans
Henry Ridgwell

Markets rose sharply on news of European leaders reaching an agreement vital to solve the region's huge debt crisis.  The deal is aimed at preventing the crisis spreading to larger eurozone economies like Italy, but analysts say more detail is needed if the crisis is to be contained.



Two years of crisis in the eurozone came down to this Brussels summit.  

Europe’s leaders met through the night.  After 11 hours of talks - with many journalists sleeping in the press room - German Chancellor Angela Merkel was among the leaders to emerge hailing a breakthrough.

“I am aware, and everybody was aware that the whole world was looking at this meeting,” she said.  “That we can show the world how we can guard ourselves from this deep economic crisis.  And I think that tonight we Europeans have taken the right measures.”

Global markets agreed.  Share indices across Europe, Asia and the United States all showed early gains Thursday.  

But the optimism may be short-lived, says Tobias Blattner, European economist at Daiwa Capital Markets.

“Now the question is obviously, ‘How long will it last?’  And I think this is where we are skeptical and we think it will be a very short-lived episode simply because the summit yesterday left too many questions open," said Blattner.

Eurozone leaders agreed a three-pronged approach.

Banks will be recapitalized with 100 billion euros.  Greece’s debtors will be asked to write-off half of the debts, and the European bailout fund will be ‘leveraged up’ to about a trillion euros to try to cover other indebted countries like Italy or Spain.

Not good enough, says Simon Tilford, chief economist at analyst group the Center for European Reform.

“There is no new money involved," said Tilford. "What they are essentially saying is that we will cover a proportion of your losses if these countries get into funding difficulties.  Now the question is whether that will be enough to persuade investors to lend to countries.  It is not clear it will be.”

In Greece, which faces years of austerity cutbacks under the bailout, reaction was despondent.

One man said, "I do not believe it was a good deal, but it was inevitable.  At this moment, Greece has gone bankrupt."

Another man added, "It is a dark and shady deal.  Everything here gets worse by the day.  God help us."  

Investors’ concern is turning to Italy.  Debt in the eurozone’s third-biggest economy is 120 percent of GDP.

In Rome, the deal was greeted with skepticism.

"I think it all stems from the fact that we are not credible anymore,” one commuter said.

“I do not think this government is capable of managing this crisis situation,” said another.

In a week, many of the European leaders will reassemble at the G20 summit in France.  There, analysts say Europe will look for international support from countries like China to help bolster the debt deal.

You May Like

Video Video Claims to Show Shi'ite Forces in Iraq Executing Sunni Boy

While not yet independently confirmed, brutal killing already has gotten attention of Islamic State followers on social media More

After Six Years, Little Change for Niger Delta's Former Militants

Nigerians who laid down arms in exchange for government amnesty subsidies fear program may end with upcoming presidential elections More

Vietnam Pushes for More Educated Drivers to Curb Road Deaths

Transportation officials hope that making a greater effort to get drivers to learn the rules of the road will reduce fatal crashes 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.
NASA Spacecraft Approaches a Dwarf Planeti
X
George Putic
March 04, 2015 8:51 PM
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 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 1960's 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 7th 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 1960’s.
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.
Video

Video Land Disputes Arise Amid Uganda Oil Boom

Ugandan police say there has been a sharp increase in land disputes, with 10 new cases being reported each day. The claims come amid an oil boom as investors appear to be cashing in by selling parcels of land to multiple buyers. Meanwhile, the people who have been living on the land for decades are chased away, sometimes with a heavy hand. VOA's Serginho Roosblad reports.
Video

Video In Russia, Many Doubt Opposition Leader's Killer Will Be Found

The funeral has been held in Moscow for Boris Nemtsov, the opposition leader who was assassinated late Friday just meters from the Kremlin. Nemtsov joins a growing list of outspoken critics of Russia under the leadership of President Vladimir Putin who are believed to have been murdered for their work. VOA’s Daniel Schearf reports from Moscow.
Video

Video Simulated Astronauts Get Taste of Mars, in Hawaii

For generations, people have dreamed of traveling to Mars to explore Earth's closest planetary neighbor. VOA's Mike O'Sullivan reports that while space agencies like NASA are planning manned missions to the planet, some volunteers in Hawaii are learning how humans will cope with months in isolation on a Mars base.
Video

Video Destruction of Iraq Artifacts Shocks Archaeologists

The city of Mosul was once one of the most culturally rich and religiously diverse cities in Iraq. That tradition is under attack by members of the Islamic State who have made Mosul their capital city. The Mosul Museum is the latest target of the group’s campaign of terror and destruction, and is of grave concern to archaeologists around the world. VOA’s Kane Farabaugh reports.
Video

Video Smartphones May Help in Diagnosing HIV

Diagnosing infections such as HIV requires expensive clinical tests, making the procedure too costly for many poor patients or those living in remote areas. But a new technology called lab-on-a-chip may make the tests more accessible to many. VOA’s George Putic reports.
Video

Video Afghan Refugees Complain of Harassment in Pakistan

Afghan officials have expressed concern over reports of a crackdown on Afghan refugees in Pakistan following the Peshawar school attack in December. Reports of mass arrests and police harassment coupled with fear of an uncertain future are making life difficult for a population that fled its homeland to escape war. VOA’s Ayesha Tanzeem reports from Islamabad.

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