A breather in eurozone crisis

Sept. 14, 2012 at 1:06 PM
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NICOSIA, Cyprus, Sept. 14 (UPI) -- The sense of urgency among European finance leaders concerning the debt crisis looming over several countries appears to have eased, key leaders suggested.

"Fund managers are bringing their money back to Europe; that is good for the economy," said European Central Bank President Mario Draghi, The New York Times reported Friday.

At a news conference in Nicosia, Cyprus, where finance leaders are gathering for a two-day meeting, German Finance Minister Wolfgang Schauble said "we'll have a lot of interesting discussions," which suggests a calm dialogue is expected while leaders discuss how best to proceed with bailouts for Greece and Spain, the newspaper said.

"Europe is stabilized ... equipped to deal with all phenomena that come along," said Austrian Finance Minister Maria Fekter.

Discussions are expected to center on how to respond to Greece's request for more time to meet terms mandated by the so-called troika -- the European Central Bank, the International Monetary Fund and the European Commission -- in return for ongoing support.

Although Spain has not formally requested help and is not expected to do so soon, the country's financial difficulties will be a key point of discussion, the Times reported.

Three dramatic events have helped give the three-year crisis a rare moment of calm -- including the ECB decision to buy short term bonds of countries struggling to climb out of debt, a decision by a constitutional court in Germany to allow the country to contribute to the $646 billion European Stability Mechanism, and an election in the Netherlands this week that revealed stronger-than-expected pro-eurozone support.

Voters in Germany and the Netherlands, among other countries, have expressed increased frustration with Greece's ongoing difficulties.

The government in Athens is looking for an additional $15 billion in austerity budget cuts, while troika representatives are in the county working out recommendations that could grant or deny the next $323 billion in loans.

Still, Dutch Finance Minister Jan Kees de Jager, reasoned Friday that the international community might give Greece some time.

"If the deficit turns out to be somewhat worse than expected because of a temporary downturn in the economy, there could be some time but not money, not extra money," de Jager said.

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