Finance chiefs hopeful on Europe debt crisis
Source: Agencies |
January 28, 2012, Saturday
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Print Edition
Print Edition
LEADING finance chiefs sought to reassure anxious global business leaders yesterday in Switzerland that Europe is on track to solve its debt crisis before it drags the world's economies down.
The finance chiefs said the picture in Europe has changed over the past two months as the European Central Bank has loaned billions of euros to fragile banks, indebted countries have pushed through convincing reforms and EU leaders have come near to building a closer fiscal union that would make their common currency stronger.
Several also signaled yesterday that Greece was close to clinching a crucial debt-reduction deal with private bondholders -- a key element in Europe's efforts to stem a two-year debt crisis that is causing ripples around the globe. The crisis is a central topic at the World Economic Forum, a gathering of government and business leaders at Davos, a Swiss ski resort.
US Treasury Secretary Timothy Geithner said the fate of the US economy hinges on Europe's debt crisis, along with potential tensions with Iran. He said the main piece of unfinished business for Europe is building a bigger fund to help troubled economies.
But while French Finance Minister Francois Baroin said that fund needs to be increased to calm markets, his German counterpart, Wolfgang Schaeuble, indicated that his government is not prepared to do so. Germany, as Europe's biggest economy, would face the biggest bill.
"We must not give the wrong incentives," Schaeuble said. "You can make any figure. It will not work if the real problems will not be solved."
The finance chiefs said the picture in Europe has changed over the past two months as the European Central Bank has loaned billions of euros to fragile banks, indebted countries have pushed through convincing reforms and EU leaders have come near to building a closer fiscal union that would make their common currency stronger.
Several also signaled yesterday that Greece was close to clinching a crucial debt-reduction deal with private bondholders -- a key element in Europe's efforts to stem a two-year debt crisis that is causing ripples around the globe. The crisis is a central topic at the World Economic Forum, a gathering of government and business leaders at Davos, a Swiss ski resort.
US Treasury Secretary Timothy Geithner said the fate of the US economy hinges on Europe's debt crisis, along with potential tensions with Iran. He said the main piece of unfinished business for Europe is building a bigger fund to help troubled economies.
But while French Finance Minister Francois Baroin said that fund needs to be increased to calm markets, his German counterpart, Wolfgang Schaeuble, indicated that his government is not prepared to do so. Germany, as Europe's biggest economy, would face the biggest bill.
"We must not give the wrong incentives," Schaeuble said. "You can make any figure. It will not work if the real problems will not be solved."
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