BRUSSELS (MNI) – The European Commission and the Eurogroup will
produce a plan in March of next year for jointly-issued “Eurobonds,”
Greece’s Prime Minister Lucas Papademos revealed Friday afternoon.
Briefing reporters following the two-day EU leaders’ summit here,
Papademos said the plan for such a bond would be within the framework of
new fiscal rules being developed by the Eurozone countries and in the
context of ongoing deficit reduction efforts by national governments. He
said the issue of Eurobonds was discussed by the leaders at their
summit.
This would seem to indicate that Germany, which appeared to get its
way earlier this week in dropping the Eurobond idea, may not have
prevailed on that point afterall.
Papademos, the caretaker head of a “technocratic” government which
is in power only until Greek elections next spring, predicted that the
decisions taken by EU leaders Thursday and Friday to re-cement their
commitment to fiscal discipline would have a “positive market impact.”
He said leaders took decisions that will help address the crisis in the
short term and its causes over the longer-term.
He lauded the decision by leaders to overturn a previous decision
by which private creditors would have been obliged to take losses on
their sovereign bonds in future bailouts. “The Greek debt situation is
unique. It is an exceptional case,” Greece’s government leader said. The
elimination of mandatory PSI from future government bailouts “will have
a comforting market effect,” he said.
Papademos, a former vice president of the European Central Bank,
said that the ECB’s decisions Thursday to cut interest rates, bolster
liquidity provisions to banks, and broaden the pool of eligible
collateral were “particularly important.”
[TOPICS: M$Y$$$,MGX$$$,MT$$$$,M$X$$$,M$$CR$,M$$EC$]
