Workers in Greece have demonstrated in the millions against the austerity measures imposed by the government resulting from the world economic crisis gripping the capitalist system globally. Another general strike was held on March 11, 2010.
Originally uploaded by Pan-African News Wire File Photos
20:55 Mecca time, 17:55 GMT
Greece debt fears rattle markets
Greece's prime minister said his country would not 'run away' from the crisis
Financial markets across the world have continued to experience considerable volatility amid a growing government debt crisis in Europe sparked by Tuesday's downgrading of Greece's debt to junk status.
Investors are looking for reassurance from Germany that it will come to the aid of Athens in order to keep its financial troubles from spreading to other countries.
Angela Merkel, the German chancellor, Dominique Strauss-Kahn, the International Monetary Fund (IMF) chief and Jean-Claude Trichet, the European Central Bank president, held talks in Berlin on Wednesday to discuss the crisis.
Merkel said that negotiations between all parties, including the Greek government, needed to be "accelerated" and that she hoped they could "be wrapped up in the coming days".
Austerity programme
Greece has requested $52bn from eurozone governments and the IMF to shore up its finances but the reluctance of Germany, the largest country using the euro, to move quickly in providing assistance has sent shudders through markets.
Merkel reiterated on Wednesday that Germany expected Greece to implement an "ambitious" austerity programme if it wanted a helping hand.
Credit ratings agency Standard & Poor's also downgraded Spain's debt on Wednesday, saying its decision to lower its rating by one notch to AA from AA+ was due to its expectation that the country will suffer an "extended" period of subdued economic growth.
The agency said Spain's economic growth in the years to 2016 is likely to average around 0.7 per cent a year against its previous expectation of above one per cent.
Investors fear any rescue package may not reach Greece to enable it to avoid default by May 19, when $12bn in bond payments becomes due.
Strauss-Kahn said on Wednesday that confidence in the eurozone as a whole was on the line following the crisis.
"It is the confidence in the whole [euro]zone that is at stake," he said.
German assurances
Wolfgang Schaeuble, Germany's finance minister, insisted that legislation to free up his country's contribution could get through both houses of parliament within a week, as early as May 7, if Greece wraps up its ongoing talks with the IMF and the European Union quickly enough.
Guido Westerwelle, Germany's foreign minister, echoed that commitment, insisting that Berlin is ready to act quickly in order to protect the euro.
"We will protect our currency and this is in the deepest interest of every European citizen," he said.
In Europe, Germany's DAX was down 0.5 per cent in afternoon trading on Wednesday, while France's CAC-40 fell 0.8 per cent.
However, Britain's FTSE 100 index of leading shares was up 0.2 per cent amid hopes of an imminent deal
Wall Street opened solidly, with the Dow Jones industrial average up 0.3 per cent.
Earlier, Asian markets ended considerably lower.
Japan's benchmark Nikkei share average was down around 2.5 per cent in afternoon trade while Hong Kong's Hang Seng and South Korea's Kospi were both lower by more than one per cent.
Bond 'meltdown'
In addition to downgrading Greece's debt rating on Tuesday, Standard & Poor's also marked down Portugal's debt status.
The downgrade [Greece's] has "sent the bond markets into meltdown and equity investors toward the exits," said Michael Hewson, an analyst with CMC Markets in London.
Nicholas Skourias, chief investment officer at Pegasus Securities in Athens, said: "There is a very serious risk of contagion, it's something like post-Lehman period. Everybody is panicking and there is a lot of fear in the market".
"I think that today we will have a lot of pressure as well because there is this fear of contagion."
Speaking during a cabinet meeting on Wednesday, George Papandreou, the Greek prime minister, said that every EU member must "prevent the fire that intensified through the international crisis from spreading to the entire European and global economy".
Insisting Greece was determined to bring its economy into order, he said: "We will show that we do not run away. In difficult times we can perform, and we are performing, miracles.
"Our government is determined to correct a course that has been followed for decades in a very short time."
Source: Agencies
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