The EU is poised to reach agreement on a potential multi-billion euro bail-out for Greece after weeks of crisis, senior officials have told the BBC.
They say the rescue package would be available if Greece asked for assistance to finance its huge deficit. Eurozone ministers are expected to finalise a proposal setting out a range of options as early as Monday.
Greece has not requested help so far. The EU says no deal has been agreed but technical work is continuing. Greece is struggling to deal with a 300bn euro ($419bn; £259bn) debt. It needs to raise about 20bn euros ($27bn) on bond markets to refinance debt maturing in April and May. Its deficit is more than four times higher than eurozone rules allow. Austerity measures aimed at reducing it have provoked public anger. The crisis has also undermined the euro. Full Story
This statement is a joke “They say the rescue package would be available if Greece asked for assistance to finance its huge deficit”. Off course they are asking for assistance, indirectly they have been begging for assistance from the very start. This aid package will trigger other beggar members of the PIIGS group to eventually join the handout club. Next in line is probably Spain. If the top members of the EU wanted to send a strong message to the weak members they should have stuck hard and fast to their previous claims that no aid would be forthcoming.
Greece should have been given a simple ultimatum, meet the requirements or leave. This marks the beginning of a new trend. As members cannot deflate their currency, they will run massive deficits as a way to deal with the inability to devalue their currency as a means to make their exports competitive in the global markets. We have entered the devalue or die era, where each nation will eventually seek to devalue its currency as a a means to gain a competitive edge over its peers. China, by pegging its currency to the dollar is actively using this technique as a means to gain a competitive edge. Many Asian nations are also jumping aboard so expect this trend to pick up. If the EU is unable to find a long term solution to its problem, the EURO could end up becoming a relic of the past.