Greece Teeters On The Edge…Will It Fall?
Jun 17, 2011 18:19:54 GMT -5
Post by PrisonerOfHope on Jun 17, 2011 18:19:54 GMT -5
Greece wracked by political turmoil in debt crisis
AP
By NICHOLAS PAPHITIS, Associated Press – Thu Jun 16, 4:11 pm ET
ATHENS, Greece – Greece was wracked by political turmoil Thursday as the embattled prime minister faced down a party revolt over new austerity measures — a bitter dispute that forced the EU to hint at new loans so Greece can fend off a summer default.
Prime Minister George Papandreou has struggled to garner support for a new package of euro28 billion ($39.5 billion) in spending cuts and tax hikes demanded by the European Union and the International Monetary Fund, which last year granted his debt-ridden nation euro110 billion ($155 billion) in bailout loans.
But the measures have sparked riots on the streets of Athens and open criticism from his own Socialist lawmakers. Papandreou's desperate efforts to form a coalition government with the opposition conservatives collapsed Wednesday, and the political crisis deepened Thursday when two of Papandreou's lawmakers resigned. A planned Cabinet reshuffle was delayed till Friday, after Papandreou chaired a seven-hour emergency meeting with Socialist lawmakers to try and ease the crisis.
The party feud heightened worldwide concern that a Greek financial collapse could trigger panic elsewhere in the 17-nation eurozone — a fear that saw borrowing costs in vulnerable EU countries surge and stock markets come under pressure.
"We will prevail and we will hold on. We have as a country in the past successfully faced major crises. As hard at this struggle is, we cannot run away from our fight," Papandreou told party lawmakers. "We will fight and we will win, for Greece, its people and the future of the new generations."
Fearing further chaos, the EU's top financial official, Olli Rehn, indicated in Brussels that Greece will likely get its next financial lifeline in July, despite the EU finance ministers' failure to agree on a new bailout package for the country.
Rich EU countries like Germany and the Netherlands want private creditors to share a big part of the burden of helping Greece, while the European Central Bank fears those demands could trigger a partial default that would spark panic on financial markets and pummel banks in Greece and across Europe.
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news.yahoo.com/s/ap/20110616/ap_on_bi_ge/eu_greece_financial_crisis