Looking for ways to rescue Europe from financial crisis
French President Nicolas Sarkozy walks with German Chancellor Angela Merkel
Adriene Hill: A new plan is emerging to fix the euro debt crisis, and well, save the euro. It involves Greece being allowed to default on its debt. But there are doubts about the plan and whether it can be implemented soon enough.
For more, Marketplace's Stephen Beard joins us live from London. Good morning, Stephen.
Stephen Beard: Hello, Adriene.
Hill: So what's this new plan?
Beard: It's not a formal plan yet. This is coming from off the record briefings from IMF and other officials in Washington. But there are three elements -- Greece defaults on 50 percent of its debt, the eurozone bailout fund is beefed up to around $3 trillion, and some of this money would then be used to strengthen European banks.
Hill: Now, this isn't the first plan we've seen put forward to end this crisis -- will this one actually work?
Beard: If it's implemented, it would settle a lot of investors' fears. But there is a feeling this is not so much a plan -- more an American wishlist. There is still a lot of disagreement among Europeans about a some of this, for example, whether Greece should be allowed to default.
Then there's the timing. The idea is, it'll be six weeks before this plan is formally unveiled. That's a problem, says Neil MacKinnon of VTB Capital Group.
Neil MacKinnon: Any delay leaves open the possibility of fresh volatility, fresh market crises, an increase in the odds of global economic recession.
And adding to the uncertainty this week, you've got parliaments in four countries -- including Germany and Finland -- voting on the previous rescue plan. If any of these parliaments vote no, all bets are off that the eurozone will have to come up with yet another plan.
Hill: Marketplace's Stephen Beard in London. Thanks, Stephen.
Beard: OK, Adriene.