There have been rumors that Germany is coming to aid of Greece, but there are some formidable obstacles in such a ploy.
First European Union (EU) law bars the European Central Bank or national central banks from bailing out EU members through buying their debt or offering loans, according to a German parliament research unit. "There are no identifiable grounds for an alternative interpretation."
Secondly, a German government spokesman, Ulrich Wilhelm, said: "reports that a decision had 'virtually been taken' to offer Greek assistance were 'unfounded.'"
Germany's Chancellor, Angela Merkel said on January 13: "The Greek example can put us under great, great pressure."
Greek bonds rose, pushing yields down the most since 1998. It was down 37 basis points to 6.378%
If Greek aid cannot flow through official EU channels, it will pose a clear dilemma. Aid would need to be funneled through indirect means. Whether private lenders would be involved remains to be seen.
The talks are scheduled for Thursday so stay tuned for more information.
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Reader Comments (Page 1 of 1)
2-09-2010 @ 9:52PM
william lindblad said...
It is in their common interest to find a way and I really expect that this will be the case. There is also the matter of Spain and Portugal to be dealt with and that is only the economic front. These days, problems are pretty widespread and will continue until such point as respective governments find ways to implement and overcome them. I think that what is being done in the U.K. in the way of infrastructure and energy will create a deficit and pressure the pound in the short run. In the long run an opposite effect and may prove both job and competitiveness effective. In any case, they seem to be of the few with a clear policy.
2-10-2010 @ 7:53AM
lasala said...
poor germans... They have been saving money for the past decade to pay off their debt and now they have to use that money to bail out this country which lived beyond their means.
That's what they get for saving too much... They should have spend more of it for their economy so they had some return for themselves. Now they get nothing. I guess that's what they signed up for when the EU was created.