July 21st, 2011
Econintersect: Jean Claude Trichet, ECB (European Central Bank) President, sat in on a late night meeting July 20 into 21 as French President Nicholas Sarkozy and German Chancellor Angela Merkl reached a final agreement on Greece. European Council President Herman Van Rompuy was also included, but by telephone. The meeting was held just hours ahead of the EU summit to be held July 21 (Thursday) in Brussels with the purpose of finding a robust solution to the Greek debt problem. France and Germany had been at odds over just how the burden of the debt crisis should be shared among affected parties. Follow up:
Follow up:From CRI English:
Backed by Finland and the Netherlands, Germany has long demanded that private creditors should share the burden of rescuing Greece, while France and the ECB opposed such moves, arguing that it would trigger a selective default in Greece and cause more disastrous outcomes in the Eurozone.
Time had reported at the end of last week that Germany had caved to France and the ECB. However, the details of the final agreement have not yet been released so the preliminary assessment by Time cannot be confirmed.
The deal would include European banks “voluntarily” rolling over Greek debt as it comes due, Greece continuing with very unpopular extreme austerity cutbacks and the IMF (International Monetary Fund) and the EU (European Union) providing €80 to €100 billion to keep the Greek government afloat until 2013.
Of course, there is still the question of whether the debt rating agencies will put a stamp of approval on the final deal. As reported by GEI News, Standard & Poors indicated that a roll-over deal might lead to the agaency declaring a de facto default.