STEVE CHIOTAKIS: The European Union is preparing to offer more financial help to Greece. That’s on top of last year’s near $160 billion bailout.
Marketplace’s Stephen Beard is with us live from London with the latest. Hi Stephen.
STEPHEN BEARD: Hello Steve.
CHIOTAKIS: So why does Greece need more help?
BEARD: Well, the markets have forced this issue. They believe that Greece is in so much debt and its economy is so deeply mired in recession that it’s not going to be able to go back to the markets and borrow next year as planned. I mean when you look at the interest rates, Steve, that the Greeks now have to pay for long-term loans — 15 percent. That compares with 3 percent for Germany. That says there’s a risk of a Greek default, and the Greeks can’t pay 15 percent for their money. It’s unsustainable.
CHIOTAKIS: What sort of help though is Greece going to get Stephen?
BEARD: Well it might be more cash, it might be more time to pay, but there’s little doubt they will get some help.
Matina Stevis of the Greek Free Newspaper says the EU can’t afford for Greece to default because that might lead to other bailed countries also defaulting and that would be disastrous.
MATINA STEVIS: If you add up the Greek debt, the Irish debt, the Portuguese debt and potentially the Spanish debt, we’ve got a real explosive situation for European banks especially in France and in Germany who are massively exposed to these sovereign borrowers.
Never the less the Germans in particular are not going to be happy about cutting the Greek some slack because other bailed out countries might demand easier terms too and the Germans are terrified that these loans — these bailout loans — are going to turn into grants and Germany will end up picking up the tab.
CHIOTAKIS: Marketplace’s Stephen Beard in London. Stephen, thank you.
BEARD: OK Steve.
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