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Greece wins eurozone loan guarantee with proviso: last resort only

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Greece wins eurozone loan guarantee with proviso: last resort only


The birthplace of democracy has won a massive loan guarantee from its euro partners, but Greece can only get the money if it fails to raise funds on the free market first.

Ordinary Greeks felt some relief, this woman in Athens saying: “I thing there’ll be a different climate for all of us after this development.”

The development was an agreement at a summit in Brussels by the 16 European Union countries using the euro, to grant bilateral loans jointly with the International Monetary Fund, to help Greece in its debt crisis.

Greek Prime Minister George Papandreou has committed many shoulders to the wheel. He said: “I want to reiterate we are determined to confront our country’s fiscal problem, but we are also making deep changes in our economy, our political system, our society.”

Yet it is not just about saving Greece from financial perdition; the eurozone deal’s broader goal is to guarantee the economic stability of the 27-member EU bloc.

The conservative German Chancellor Angela Merkel, hailed at home for imposing strict terms, said: “On one hand, the members of the euro zone are preserving the euro’s stability, while on the other hand it’s a sign of solidarity. The euro’s stability and solidarity, therefore, are two sides of the same coin.”

The president of the Socialist group in the European Parliament, however, cast doubt on Merkel’s perceived glory.

Martin Schulz said: “Everyone knows it’s a face-saving measure to let Angela Merkel adopt a plan that’s been on the table for four weeks, and which she has rejected for four weeks. And now she says ‘yes’ to it and is celebrated as victorious. It’s a bit odd.”

There were also concerns of EU states that do not use the euro — such as Britain — about the eurogroup taking “economic governance” decisions affecting the entire 27-country bloc.

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