Lenihan in talks with EU finance chiefs on Greek crisis
Published 15/03/2010 | 05:00
FINANCE Minister Brian Lenihan is to meet his EU counterparts today to assess how Greece is faring on slashing its huge budget deficit, writes Sarah Collins.
Ministers will be holding talks against the background of growing acceptance that the EU may need to help Greece cope with the punitive interest rates it faces to borrow from financial markets.
The debt crisis has been building since Greece's socialist government admitted its budget deficit would double because previous leaders had been cooking the books.
The euro has been on a downward spiral against the dollar since December as a result, buoyed periodically by three Greek austerity packages, which aim to shave four percentage points off the deficit this year.
EU leaders last month pledged to take action to secure the euro's stability if needed, but Germany -- which as the bloc's biggest economy, would shoulder the majority of the burden -- has refused to throw its full backing behind a bailout.
EU leaders are now clamouring for a ban on the speculative trade in sovereign credit default swaps, complex financial instruments that have been blamed for aggravating the Greek debt crisis.