Europeans announced at the G7 meeting in Canada that they would resolve the financial problems that began to spread due to the Greek crisis on their own. Markets are now nervously awaiting rescue plans that will be very painful, writes Deutsche Welle.
The panic that is systematically growing in financial markets represents increasing pressure on the eurozone. At the summit of leading industrial nations in the Canadian town of Iqaluit, Europeans assured their partners that the problems surrounding the budgets of member countries such as Greece are under control. External assistance, for example from the IMF, is not needed. However, economists, bankers, and analysts are calling for a rescue concept to be presented in case certain states become insolvent. Experts fear that the crisis of public finances could ‘explode’ in the eurozone, dragging the global economy into a new spiral of crisis.
‘I believe that all our partners have the impression that Europeans will resolve this problem and that they can cope with it,’ assured German Finance Minister Wolfgang Schäuble in Canada. Greece is not a case for the IMF and is not an issue that the G7 should address. European Central Bank President Jean-Claude Trichet stated that he is confident that the Greek government will do everything necessary and that by 2012 it will reduce its budget deficit from nearly 13 percent to the allowed three percent.
Financial markets, however, doubt that Greece will be able to respond to EU pressure and implement its austerity plans against the growing protests of its citizens who are most affected. Doubts are also being transferred to some other members that also have very high deficits, namely Spain and Portugal. Investors are demanding increasingly higher interest rates for loans to these countries, and traders say that panic has partially already set in. (Deutsche Welle)
