Barroso asks Merkel to back bailout
By Paul Carrel |
March 23, 2010, Tuesday
|
Print Edition
Print Edition
THE president of the European Commission yesterday challenged German Chancellor Angela Merkel to rise above domestic politics and agree on a financial safety net for debt-stricken Greece to help preserve European monetary union.
Jose Manuel Barroso told a German newspaper that European Union leaders must decide at a summit on Thursday and Friday on a support mechanism for Greece or risk harm to their common currency, noting the euro's stability was in Germany's interest.
"We need a decision at this summit on how to deal with Greece, otherwise the heightened uncertainty will go on and on," Barroso told business daily Handelsblatt.
"We can't carry on as we are, as this would threaten the stability of the eurozone and encourage speculation," he said.
Underscoring his warning, the euro slipped to a three-week low against the dollar yesterday as investors fretted over the uncertain prospect of support for Greece.
The risk premium on Greek debt rose to its highest level since March 1 and the cost of insuring Greek debt against default also climbed.
The 16-nation eurozone remains divided over whether and how to provide financial help to Athens, whose struggles to cope with soaring debt and deficits have plunged the currency bloc into the deepest crisis of its 11-year existence.
Barroso's comments seemed to put him on a collision course with Merkel, who faces opposition at home to any bailout ahead of a key regional election in May in which her center-right coalition's upper house majority is at stake.
Merkel repeated on Sunday that Greece, which has imposed draconian austerity measures to cut its budget deficit, did not need money for now, something Greek Prime Minister George Papandreou confirmed in a telephone call with her.
"That's why I'd urge us not to stir up turbulence in the markets by raising false expectations for Thursday's council meeting," she said.
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