What have you always wondered about the economy? Tell us
BBC World Service

Possible euro debt solution: Partial Greek default, $3 trillion bailout

Marketplace Staff Sep 26, 2011
HTML EMBED:
COPY
BBC World Service

Possible euro debt solution: Partial Greek default, $3 trillion bailout

Marketplace Staff Sep 26, 2011
HTML EMBED:
COPY

Adriene Hill: One of the big problems trying to fix the European debt crisis has been trying to come up with a solution that makes all 17 eurozone countries happy. After weekend meetings of some of the world’s finance ministers, there are reports — rumors — whispers — of a solution.

For more, we go to the BBC’s Andrew Walker in London. Good morning Andrew.

Andrew Walker: Good morning.

Hill: What do we know about this plan right now?

Walker: We don’t know anything for sure — but what we’re hearing is suggestions that a deal is being put together which involves three key elements. One is a 50 percent default by Greece on its government debt — something that’s been denied by the Greek government, but nonetheless, we are hearing that. Recapitalization of European banks — that’s extra money to help them cope with any losses they may suffer. And using the European Central Bank to boost the effective firepower of the European Union’s bailout fund — something called the European Financial Stability Facility — so that it has a total effective firepower of something like 2 trillion euro, something like $3 trillion.

Hill: Now, this has been dragging on for months, and we’ve heard a ton of ideas. Why is the market seem to be responding so positively to this one?

Walker: Well the markets do seem to latch onto almost anything briefly and give it a bit of a welcome if it looks like it’s moving in what they would regard as the right direction. But think maybe there is a difference with this one. And that is, we’ve had lots of little piecemeal things. This does look like — at least it’s intended — to grapple with all the main, fundamental aspects of the crisis.

Hill: The BBC’s Andrew Walker. Thanks so much.

Walker: My pleasure.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.