E.U. leaders reach deal on Greek debt
TEXT OF INTERVIEW
Steve Chiotakis: The European Union has reached a deal on a financial rescue for Greece.
Today’s summit in Brussels involves the 27 governments that make up the E.U., and members now have a plan to prevent Greece’s financial troubles from spreading to other eurozone countries. We’re gonna bring in Marketplace’s Europe correspondent, Stephen Beard, who’s with us live this morning. Hi Stephen.
Stephen Beard: Hello, Steve.
Chiotakis: What do you know about the details of this plan?
Beard: Well not the details, just the outline. This was a plan that was hammered out before the full summit got underway, and will have now to be put to the summit. It was hammered out between the Greeks, the German and French leaders, and the head of the European Central Bank. What we know is it involves loans to the Greek government guaranteed by other eurozone members and requiring the Greek government to make a cast-iron commitment to cut its budget deficit. The Germans are stressing this is not a subsidy or a blank check; the Greeks are going to have their feet held to the fire, they’re going to get extra top supervision. And indeed, the IMF — which is used to dealing with economically wayward governments — will be offering its advice on how to get Greece through this.
Chiotakis: And will this plan, this outline that you mentioned Stephen, satisfy, do you think, the markets?
Beard: Well it’s a bit too soon to say. I mean the markets are going to be studying the detail of the plan when it emerges very carefully to see whether it’s too tough on the Greeks and likely to tip them into recession or make the deficit problem worse, or whether it’s too slack and likely to encourage other heavily-indebted eurozone countries to demand a rescue package as well. So bottom line is, until we see how this plays out, the euro is likely to remain under some pressure.
Chiotakis: Very good. Marketplace Europe correspondent Stephen Beard with us this morning. Stephen, thanks.
Beard: OK, Steve.
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