Eurozone – Euroland close to a deal on Greece
March 24, 2010 – 12:55 pmA European diplomatic source said Tuesday, March 23 evening to AFP that the sixteen countries using the common currency were "close" to an agreement to Adler Greece out of its financial crisis. This should be finalized and announced Thursday morning in Brussels at a summit of leaders of countries in the euro area, just before a meeting of Heads of State and Government of the entire European Union, according to this informed source.
The compromise, brokered largely by Germany and France, provides that Berlin accepts the establishment of a mechanism of financial support for countries in the euro area in great difficulty, which could be used in Greece. Berlin refused to do so far, saying it could set a bad precedent. The firmness of Germany has undermined the cohesion of the euro area for several days.However, "using the euro would come in addition to loans from the International Monetary Fund (IMF)," said this source. "It is therefore a joint aid where the IMF plays a central role," she added.
This is a concession to Germany, rather hostile to a European solution, favored these days the IMF intervention.In Berlin, German Chancellor Angela Merkel said Tuesday at a meeting of its parliamentary group to be ready to accept a compromise solution that would complement the European states on a voluntary loan International Monetary Fund in Athens, according to participants the meeting.
Tougher sanctions for non compliance with budgetary discipline
Similarly, in the ongoing negotiations, Berlin insists that countries in the euro area are committed to harden in the future the existing mechanism for fiscal discipline in the EU, the Stability Pact, with penalties that could be taken more easily against countries too lax. "This is the direction we're going," said the diplomatic source. In this context, time seems to be easing between Paris and Berlin on Greece."It really works actively with Germany to provide a solution that meets our German friends and objectives of solidarity within the euro area," said a French government source.
Regarding counterparties demanded by Berlin in exchange for the green light to aid in Athens, "the Germans want to simplify the current cumbersome excessive deficit countries in the euro area," said the European diplomatic source. "They wish that sanctions may be applied more automatic for countries breaching the rules too long," said the source.These sanctions would go "until the withdrawal of voting rights" of member countries at the EU ministerial meetings in Brussels and the fines would be facilitated.
The German newspaper Die Welt published on Wednesday said that the draft declaration of states of the euro area expected to be released Thursday, will also mention a possible amendment of the Treaty of the EU to tighten fiscal discipline. An allusion to Berlin will be able to exclude the future if Sampled a state of the eurozone.
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