Germany may help Greece with debt
Greece's Finance Minister George Papaconstantinou
TEXT OF INTERVIEW
Bill Radke: Global stock markets are breathing more easily about all this debt owed by Greece. There seems to be a growing sense that the European Union -- particularly Germany -- will step in with some kind of short-term fix. Our Europe correspondent is Stephen Beard, and he joins us live. Stephen, why the sudden outbreak of optimism?
Stephen Beard: Well, stories in the German media are suggesting that the Germans have changed their mind. They apparently have decided now that this debt crisis could spread to other parts of the eurozone -- Spain and Portugal, for example -- where German banks have a big exposure, and that the whole thing could destabilize the euro. So it's in Germany's interest to help the Greeks.
Radke: And what kind of help, specifically, are we talking about?
Beard: Well we don't know yet. We'll have to wait for a major summit in Brussels tomorrow to find out for sure. But the word is that the Germans will temporarily guarantee the Greek government's debts. Now that will take off the immediate pressure, but it's not a lasting solution. Geoffrey Wood at Cass Business School says Greece needs something much more radical:
Geoffrey Wood: The kind of help Greece needs is that someone comes in and takes over its economy and runs it. In particular controlling the public sector, which is totally out of control. Tax revenues don't come in, expenditure grows without limit. Until that's sorted, Greece is going to be in trouble with its debt.
What he's talking about there is a small step down the road towards a political union in Europe, a small step towards a so-called United States of Europe. That would be hugely controversial, but in the long-term it may be what's needed to save the euro.
Radke: Very interesting to watch these developments. Marketplace's Stephen Beard, thank you.
Beard: OK, Bill.