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

China’s Influence Grows With New Infrastructure Bank

Multibillion-dollar China-backed and BRICS-supported Asian Infrastructure Investment Bank seen as possible challenger to such lenders as IMF, World Bank More

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

Rabbi Michel Serfaty makes the rounds in his friendship bus to encourage dialogue and break down barriers between the two groups More

Post-deal Iran Leaders Need 'Economic Momentum' to Solidify

Economists say deal could inject more than $100 billion into coffers - not enough to entirely rescue ailing economy - but maybe adequate to create 'economic momentum' 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.
US Gay Marriage Ruling Yields Real-life Impacti
X
Michael Bowman
June 28, 2015 10:05 PM
Friday’s landmark Supreme Court decision legalizing same-sex marriage throughout the United States is an outcome few thought possible just years ago, and shows a nation that increasingly tolerates and even celebrates the hopes and aspirations of gay people. VOA’s Michael Bowman spoke to a same-sex couple that will benefit from the high court ruling, and to a Christian scholar who is apprehensive about its potential consequences for America’s faith community.
Video

Video US Gay Marriage Ruling Yields Real-life Impact

Friday’s landmark Supreme Court decision legalizing same-sex marriage throughout the United States is an outcome few thought possible just years ago, and shows a nation that increasingly tolerates and even celebrates the hopes and aspirations of gay people. VOA’s Michael Bowman spoke to a same-sex couple that will benefit from the high court ruling, and to a Christian scholar who is apprehensive about its potential consequences for America’s faith community.
Video

Video Syrians Flee IS Advance in Hasaka

The Syrian government said Monday it has taken back one of several districts in Hasaka overrun by Islamic State militants. But continued fighting elsewhere in the northern city has forced thousands of civilians from their homes. In this report narrated by Bill Rodgers, VOA Kurdish Service reporter Zana Omer describes the scene in Amouda, where some of the displaced are taking refuge.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video S. Korea Christians Protest Gay Rights Festival

The U.S. Supreme Court decision mandating marriage equality nationwide has energized gay rights supporters around the world. Gay rights remain a highly contentious issue in a key U.S. ally, South Korea, where police did a deft job Sunday of preventing potential clashes between Christian protesters and gay activists. Kurt Achin reports from Seoul.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Syrian Refugees Return to Tal Abyad

Syrian refugees in Turkey confirm they left their hometown of Tal Abyad because of intense fighting and coalition airstrikes, not because Kurdish fighters were engaged in ethnic cleansing, as some Turkish officials charged. VOA Kurdish Service reporter Zana Omer, in Tal Abyad, finds that civilians coming back to the town agree, as we hear in this report narrated by Roger Wilkison.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.
Video

Video In Syrian Crisis, Social Media Offer Small Comforts

Za’atari, a makeshift city in Jordan, may be the only Syrian refugee camp to tweet its activities, in an effort to keep donors motivated as the war in Syria intensifies and the humanitarian crisis deepens. Inside the camp, families say mobile phone applications help hold together families that are physically torn apart. VOA’s Heather Murdock reports.
Video

Video Chemical-Sniffing Technology Fights Australia's Graffiti Vandals

Cities and towns all over the world spend huge amounts of resources battling graffiti writers who deface buildings, public transport vehicles and even monuments. Authorities in Sydney, Australia, hope a new chemical-sniffing technology finally will stop vandals from scribbling on walls in the passenger areas of commuter trains. VOA’s George Putic has more.
Video

Video Cambodia Struggling to Curb Child Labor

Earlier this year a United Nations report found 10 percent of Cambodian children aged 7-14 are working – one of the highest rates in the region – and said one in four children in that age bracket are forced to quit school to help their families. Although the child labor rate has dropped over the past decade, Cambodia has a lot more to do – including keeping more children in school. Robert Carmichael reports for VOA from Phnom Penh.

VOA Blogs