News / Economy

Moody's: Greek Debt Default Risk 'Remains High'

Peter Cobus

The Moody's credit rating company says the risk of Greece defaulting on its loans "remains high," even after European leaders approved a new financial rescue for the country.

The financial services firm Monday called the $172 billion Greek rescue package, the country's second in two years, "an important step forward."  But Moody's said Greece's debt will "remain large" for years, even as large private creditors have agreed to eliminate more than half the debt the country owes them, a $142 billion reduction.

Moody's said the Athens government is unlikely to be able to secure new loans on its own in world financial markets when the bailout money runs out in the next few years.

Moody's bleak assessment came as Germany's parliament easily approved the bailout.  The move came as surveys in the country showed that Germans overwhelmingly oppose further assistance for Greece.  Germany's largest newspaper, Bild, ran a front-page headline saying "Stop!" and urged lawmakers to vote against the Greek bailout.

But German Chancellor Angela Merkel told lawmakers that rejecting it could cause unforeseen problems for Europe and the global economy.

"Nobody can say what the consequence of a denial of a second bail-out program for Greece will have for the other countries of the program like Portugal and Ireland, maybe even Spain and Italy, eventually to the euro zone as a whole and then the entire world," she said.

On Sunday, finance ministers from the world's 20 leading economies said the European Union must commit more money to a fund aimed at containing the eurozone debt crisis before other nations will provide additional resources to the International Monetary Fund.  European governments have already established a $672 billion rescue fund for future financial emergencies that is set to take effect in July, but G20 countries are pressing Europe to combine that with money remaining in a temporary fund to create a $1 trillion account.

After a two-day meeting in Mexico City, the G20 issued a statement saying that while recent signs point to a "modest global recovery," high risks remain.

IMF Managing Director Christine Lagarde said none of the G20 countries argued with the necessity of expanding the IMF financial firewall.  The Washington-based agency is seeking a $500 billion fund to go along with a "properly sized" commitment from Europe. "They all expect that the eurozone, the euro area rather, will strengthen, consolidate, reinforce its firewall and make sure that it is both adequate and credible before they look at increasing the firepower of the (IMF) fund," she said.

European countries have pledged nearly $200 billion to the IMF, but so far other countries have been reluctant to contribute more money unless Europe bolsters its own rescue fund.  The 17 countries that use the euro currency are set to discuss the "strength" of their bailout resources next month.

U.S. Treasury Secretary Timothy Geithner said G20 ministers are encouraged about the progress Europe has made in the past few months, but that rescue funds are not the only solution to the crisis. "A durable solution requires both a sustained period of economic reform and a substantial financial firewall to support those reforms.  European policy makers recognize the magnitude of the challenges ahead and they will be reviewing additional steps in the weeks ahead," he said.

Following the G20 meeting, European economic minister Olli Rehn praised what he called a "clear roadmap" and said he was confident of a positive conclusion.

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

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Video Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus 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.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.