News / Economy

World Markets Soar After EU Approves Debt Plan

A woman walks past a screen displaying the Hang Seng stock index in Hong Kong, October 27, 2011.
A woman walks past a screen displaying the Hang Seng stock index in Hong Kong, October 27, 2011.

World financial markets soared Thursday after the European Union approved a plan to cut Greece's debt in half and significantly increase a bailout fund designed to contain the eurozone debt crisis.

The Paris stock exchange jumped more than six percent, with the Frankfurt market advancing more than five percent. The London exchange closed up nearly three percent, and U.S. indexes were all ahead by more than two percent in midday trading.

Reaction to agreement

French President Nicolas Sarkozy arrives for an EU summit in Brussels on Oct. 26, 2011.
French President Nicolas Sarkozy arrives for an EU summit in Brussels on Oct. 26, 2011.

European leaders said the debt-relief agreement could help resolve the continent's two-year-long crisis and give Greece a chance to regain its economic footing. German Chancellor Angela Merkel said "we have done what needed doing." French President Nicolas Sarkozy said it was a "credible and ambitious" plan, while Greek Prime Minister George Papandreou said the result would be "a new era, a new chapter" for his country.

U.S. President Barack Obama welcomed the deal as a "critical foundation" to help solve the eurozone crisis and said the United States will support its European allies to address global economic problems.

What's included

Following 10 hours of tense negotiations in Brussels, EU leaders said they had convinced banks and investors to accept a 50 percent loss on Greek government bonds, effectively reducing Greek debt by $140 billion. At the same time, the banks are required to raise an additional $148 billion by June. The 17-nation bloc that uses the euro currency is increasing the firepower of its bailout fund to $1.4 trillion to cover future assistance for debt-ridden nations.

The deal still leaves Greece with a significant debt burden - estimated at 120 percent of its economic output in 2020, down from 160 percent now. But Greek Finance Minister Evangelos Venizelos said that debt level "becomes viable" for the country.

The Euro

French Finance Minister Francois Baroin said the deal has effectively saved the European single currency, telling French radio that it will "stabilize the eurozone and global growth."  World Bank chief Robert Zoellick welcomed the deal, as did officials in China and Japan.

Financial analysts and world leaders outside Europe have said in the past that the continent's leaders were too timid in dealing with the crisis. International creditors have approved single bailouts for Ireland and Portugal and two for Greece. Those bailouts failed to calm the fears of financial markets that Greece would evenutally default on its obligations, and that the debt contagion would spread to bigger European economies in Italy and Spain.

Analysts said Thursday the Brussels agreement could give the continent's weaker economies more time to grow and adapt to the austerity measures their governments have imposed.

You May Like

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license 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.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.