The European Commission has urged Germany and other eurozone governments to put up a package of government-to-government loans to ease Greece’s financial plight and end weeks of financial turmoil and speculation.
European Commission President Jose Manuel Barroso said on Friday that European aid was necessary because “we cannot prolong any further the current situation.”
He spoke of “coordinated bilateral loans” that would not have to be paid out immediately.
PHOTO: EPA
Even as a standby gesture, Barroso said, the availability of aid from Greece’s partners would show financial markets that EU nations are united to defend their single currency and the stability of the eurozone, the area of 16 EU countries that share the euro as their currency.
Speaking to reporters, Barroso urged EU leaders to agree on “coordinated bilateral loans” at a two-day summit opening on Thursday in Brussels.
He did not elaborate on loan or participation conditions or other details.
In Athens, Greek government spokesman George Petalotis called Barroso’s appeal a “positive development.”
“We would like a clear declaration of this so that we can borrow money at a reasonable rate,” Petalotis said in Athens.
EU sources have estimated that Greece needs a financial injection of about 20 billion euros (US$27 billion).
Barroso’s proposal came as Germany and the EU head office were at loggerheads after German officials said Berlin cannot rule out financial aid for Greece from the IMF.
EU officials prefer to resolve the Greek financial crisis through European aid. But Barroso said he “did not want to speculate if there will be a financial contribution from the IMF.”
Germany — Europe’s biggest economy — has been reluctant to pledge direct financial aid because German public opinion takes a dim view of the shoddy statistics-keeping that have long hidden the true size of Greek deficits and debts.
On Thursday, Greece warned it would be forced to turn to the IMF for help — which would be an embarrassment for the single currency bloc — if the EU fails to extend any concrete support package to help reduce its market borrowing rates.
A European or IMF backstop would be aimed at reassuring markets and bringing down the high rates demanded from Greece as it seeks to borrow some 54 billion euros this year to plug its budget gap.
“We haven’t ruled out IMF financial assistance,” Ulrich Wilhelm, a spokesman for German Chancellor Angela Merkel, told reporters.
EU sources, speaking privately because of the sensitive nature of the issue, said Germany would have to take part in a loan package, or “the deal would not be credible.”
EU officials said privately the Commission fears Germany’s talk of a possible IMF bailout could encourage Austria, Finland and the Netherlands, which already prefer an IMF solution.
Greek Prime Minister George Papandreou has said he expects EU leaders to decide at the Thursday through Friday summit on a blueprint of aid from the 16 eurozone countries.
“Our clear priority is for Greece’s problems to be solved within the framework of the eurozone,” he said. “That is very clear.”
SPEED OF LIGHT: US lawmakers urged the commerce department to examine the national security threats from China’s development of silicon photonics technology US President Joe Biden’s administration on Monday said it is finalizing rules that would limit US investments in artificial intelligence (AI) and other technology sectors in China that could threaten US national security. The rules, which were proposed in June by the US Department of the Treasury, were directed by an executive order signed by Biden in August last year covering three key sectors: semiconductors and microelectronics, quantum information technologies and certain AI systems. The rules are to take effect on Jan. 2 next year and would be overseen by the Treasury’s newly created Office of Global Transactions. The Treasury said the “narrow
SPECULATION: The central bank cut the loan-to-value ratio for mortgages on second homes by 10 percent and denied grace periods to prevent a real-estate bubble The central bank’s board members in September agreed to tighten lending terms to induce a soft landing in the housing market, although some raised doubts that they would achieve the intended effect, the meeting’s minutes released yesterday showed. The central bank on Sept. 18 introduced harsher loan restrictions for mortgages across Taiwan in the hope of curbing housing speculation and hoarding that could create a bubble and threaten the financial system’s stability. Toward the aim, it cut the loan-to-value ratio by 10 percent for second and subsequent home mortgages and denied grace periods for first mortgages if applicants already owned other residential
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
TECHNOLOGY EXIT: The selling of Apple stock might be related to the death of Berkshire vice chairman Charlie Munger last year, an analyst said Billionaire Warren Buffett is now sitting on more than US$325 billion in cash after continuing to unload billions of US dollars worth of Apple Inc and Bank of America Corp shares this year and continuing to collect a steady stream of profits from all of Berkshire Hathaway Inc’s assorted businesses without finding any major acquisitions. Berkshire on Saturday said it sold off about 100 million more Apple shares in the third quarter after halving its massive investment in the iPhone maker the previous quarter. The remaining stake of about 300 million shares was valued at US$69.9 billion at the end of
RSS