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

Islamic State Survivor: A Yazidi Girl's Tale

Sarah Said Haydar, captured a year ago while fleeing Islamic State onslaught in northern Iraq, was so traumatized by militants, she sought to end her own life More

EU, US Applaud Kosovo Law on Special Court

Joint statement says lawmakers' decision to address allegations of war crimes 'demonstrated their commitment to the rule of law and to honor international agreements' More

ASEAN Ministers to Push for S. China Sea Agreements

According to documents obtained by VOA Khmer, ministers will stand up for 'freedom of navigation, unimpeded lawful maritime commerce, trade and over flight' 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.
Cambodia Makes Progress Curbing Bear Tradei
X
Robert Carmichael
August 04, 2015 3:07 PM
Cambodia’s wild bears are under unprecedented pressure. Their native forests are being cut down at record rates, and China's huge demand for traditional medicine has made them targets. But experts say Cambodia's conservation efforts are setting an example that has put it well ahead of its neighbors in protecting bears. Robert Carmichael reports for VOA from Phnom Penh.
Video

Video Cambodia Makes Progress Curbing Bear Trade

Cambodia’s wild bears are under unprecedented pressure. Their native forests are being cut down at record rates, and China's huge demand for traditional medicine has made them targets. But experts say Cambodia's conservation efforts are setting an example that has put it well ahead of its neighbors in protecting bears. Robert Carmichael reports for VOA from Phnom Penh.
Video

Video Growing Number of E. Jerusalem Palestinians Seek Israeli Citizenship

Most Palestinians living in East Jerusalem have long rejected the option of full Israeli citizenship, seeing it as a betrayal to their political cause - the formation of a Palestinian state with East Jerusalem as its capital. But as that dream remains elusive, more and more Palestinians are applying for Israeli citizenship. Zlatica Hoke reports the decision is hard for many Palestinians who say they have to be pragmatic about it.
Video

Video With No Money, More Students, African Universities Struggle

Academics from around the African continent converged in Johannesburg last week for the African Universities Summit, a chance to tackle some of the major issues facing higher education in Africa today. VOA's Anita Powell reports from Johannesburg.
Video

Video Iraqi Yazidis Fear Death of Their Community

A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Bangkok Warned It Soon Could Be Submerged

Italy's Venice and America's New Orleans are not the only cities gradually submerging. The nearly ten million residents of the Bangkok urban area now must confront warnings the city could become uninhabitable in a few decades. VOA Correspondent Steve Herman reports from the Thai capital.
Video

Video Inclusive Gym Gets People With Disabilities in Fitness Spirit

Individuals with special needs are 58 percent more likely to be obese than the general population. According to the U.S. Centers for Disease Control, they also have an increased likelihood of anxiety, depression and social isolation. But a sports club outside Washington wants to make a difference in these people's lives. With Carol Pearson narrating, VOA's June Soh reports.
Video

Video Wisconsin's Voter ID Law Still Mired In Controversy

Voter ID laws have sparked controversy across the US. More than 30 states enacted laws requiring citizens to show identification before they vote. Against fierce opposition, the state of Wisconsin recently enacted one the most restrictive voter ID laws in country. As Jeff Swicord reports, no one can predict its impact as the 2016 election nears.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Ebola Vaccine Hailed as Highly Effective

At last, there's a way to end the suffering from the Ebola epidemic that has ravaged West Africa for more than a year. Researchers say the vaccine is so effective, there may never be a major outbreak of Ebola again. VOA's Carol Pearson reports.
Video

Video Special Olympics Show Competitors' Skill, Determination

Special Olympics competitions will wrap up Saturday in Los Angeles, and the closing ceremony for athletes with intellectual disabilities will be held Sunday night. In a week of competition, athletes have shown what they can do through skill and determination. VOA's Mike O'Sullivan reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Shooter’s Grill: Serving Food with a Touch of the Second Amendment

Shooter's Grill, a restaurant in Rifle, Colorado, attracts visitors from all over the world as well as local patrons. The reason? Waitresses openly carry loaded firearms as they serve food, and customers are welcome to carry them, too. VOA's Enming Liu and Lin Yang paid a visit to Shooter's Grill, and heard different opinions about this unique establishment.
Video

Video Despite Controversy, Business Owner Continues Sale of Confederate Flags

At Cooter’s, a store in rural Sperryville, Virginia, about 120 kilometers west of Washington, D.C., Confederate flags are flying off the shelves. The red, white and blue battle flag, with 13 white stars representing the Confederate states, was carried by southern forces during the U.S. Civil War in the 1860s. The South had seceded from the Union over several key issues of disagreement, including slavery. VOA’s Deborah Block has the story.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.

VOA Blogs

World Currencies

EUR
USD
0.9118
JPY
USD
124.31
GBP
USD
0.6420
CAD
USD
1.3048
INR
USD
64.136

Rates may not be current.