Euro leaders 'optimistic' Greek deal can be approved Monday
BERLIN (AP) – The leaders of Germany, Italy and Greece are "optimistic" that a deal on a second bailout for Athens can be clinched next week, a spokesman for German Chancellor Angela Merkel said Friday.
High schools students carry a banner reading 'we break the fear' and chant 'bread-education-freedom' in front of the Parliament building in Athens Feb. 17, 2012.
High schools students carry a banner reading 'we break the fear' and chant 'bread-education-freedom' in front of the Parliament building in Athens Feb. 17, 2012.
Agreement on a second, €130 billion ($170 billion) bailout has been delayed for months due to doubts over Greek political leaders' commitment to tough new austerity measures as well as the worsening economic situation in the country that kicked off Europe's debt crisis two years ago.
The statement from Merkel's spokesman is the strongest indication yet that finance ministers from the 17 euro countries can approve the new rescue at their Brussels meeting Monday.
"The three leaders are optimistic that the finance ministers can find a solution to the pending questions at the Eurogroup on Monday and thereby contribute to the stabilization of Greece," Steffen Seibert said in a statement, after Merkel, Italian Prime Minister Mario Monti and Greece's Premier Lucas Papademos held a conference call earlier Friday.
The three leaders discussed the second rescue package as well as the latest developments in the wider eurozone, Seibert said.
In the euro zone
Countries that use the euro currency: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain
Greece is under pressure to get the green light on the bailout so it can move ahead with a related €100 billion ($130 billion) debt-relief deal with private bondholders that will take several weeks to implement.
That deal has to be completed before March 20, when Athens faces a €14.5 billion bond redemption it cannot afford.
Meanwhile, in Portugal, the leader of the country's main opposition party pressed the government to ask international lenders for a one-year extension on the country's debt reduction targets.
Debt-stressed Portugal is locked into an austerity program through 2013 in return for last year's €78 billion ($103 billion) financial rescue.
All three major parties — the governing center-right Social Democrat and Popular parties, and the main opposition center-left Socialist Party— endorsed the bailout terms.
However, the austerity measures are widely blamed for a deepening recession, with the government forecasting a 3% contraction this year, and a record 14% jobless rate.
Socialist leader Antonio Jose Seguro told Parliament that economic conditions have changed considerably since the bailout terms were agreed. He argued that austerity during an economic downturn is misguided.
"This remedy is wrong," Seguro said.
But Prime Minister Pedro Passos Coelho, who came to power seven months ago and has staked his reputation on turning around Portugal's fortunes, repeated his commitment to the bailout program.
"This government won't ask for any more money, nor more time," he told lawmakers. "This government will abide by what was agreed and started eight months ago."