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

Photogallery Americans Celebrate Thanksgiving With Feasts, Festivities

Holiday traditions include turkey dinners, 'turkey trots,' American-style football and New York parade with giant balloons More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee 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 Community Kicks Off Thanksgiving With Paradei
X
Anush Avetisyan
November 26, 2014 10:57 PM
Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8016
JPY
USD
117.76
GBP
USD
0.6340
CAD
USD
1.1268
INR
USD
61.850

Rates may not be current.