By Ria Novosti
Greek Prime Minister George Papandreou urged the EU to take “forceful decisions” to save his country from defaulting on its debt as Eurogroup failed to give nay details of further bailout support.
“If Europe does not make the right, collective, forceful decisions now, we risk new, and possibly global, market calamities due to a contagion of doubt that will could engulf our common union,” Papandreou said in a letter to Eurogroup President Jean-Claude Juncker, published on Tuesday in Athens News.
Last month Greece approved an austerity package, intended to attract to the budget an additional 28 billion euro ($40 billion), or 12% of its GDP, until 2015. In exchange, the country got a 12-billion euro tranche.
However, an emergency meeting of finance ministers from the 17 countries that share the European currency on Monday, failed to produce any tangible result on bailout support to Greece, which has a total debt of $490 billion.
The ministers pledged more measures will come “shortly” to stave off bankruptcy, which is threatening the stability of the eurozone, but set no deadline.
In a joint statement, the ministers said they had tasked the Eurogroup Working Group with drafting measures to better respond to the crisis in Greece.
The group is “to explore the modalities for financing a new multi-annual adjustment program, steps to reduce the cost of debt-servicing and means to improve the sustainability of Greek public debt,” the statement reads.
“This reinforced strategy should provide the basis for an agreement in the Eurogroup on the main elements and financing of a second adjustment program for Greece shortly,” the group said.
In his letter to Juncker, the Greek premier also criticized a push by Germany to involve private bond holders in sharing the burden of a second bailout package for Greece with bond rollovers.
“The attempt over the past ten days to structure private participation in our recovery program, for example, has led to public warnings that the rating agencies would declare a selective default,” the letter reads.
“While we are not against PSI in principle the proposal that was tabled seems to be flawed. It could prove to be too expensive, too little and too dangerous,” the Greek premier added.