Greeks stabilise ship as market rallies

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Greeks stabilise ship as market rallies

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The eurozone’s big two have agreed on measures to tackle the Greek debt crisis, notably the voluntary participation of private creditors.

The French, the European Central Bank and the European Commission won over the German Chancellor, who had wanted to force big banks and private investors to take a share of the second Greek bailout.

“France’s and Germany’s commitment to defend the euro’s stability is total,” said French President Nicolas Sarkozy.

Europe’s finance ministers meet on Sunday and Monday to thrash out the details.

In Athens George Papandreou put an end to political instability for the time being by naming and swearing in a new government, and will present it to parliament for a vote of confidence on Tuesday. The new finance minister is an experienced one-time rival of Papandreou for the Socialist leadership.

“The country must be saved and will be saved. It must regain its fiscal and economic control. It must exit this whirlwind,” said Evangilos Venizelos.

Many analysts say the whirlwind is in part the Greek’s own making; the economy is hostage to too many special interests and tied up in red tape. They accuse governments of cooking the books during 15 years of growth that was not reinvested, instead going on higher wages and more public spending; yet few Greeks seem to want to recognise this.

At least the markets took heed of Friday’s news, and rallied in Greece and the euro’s favour.