Apr 3
Failure to Agree on Aid Payments Europe Greece
Monday, 20 June 2011 05:27

european-union-flagsEuropean governments failed to agree on the Greek loan payment to avoid default. Euro zone officials have encouraged the Greek finance minister to make legislation to cut the budget deficit and selling state assets.

Greece promised to get a € 12 billion or about $ 17.1 billion in July. Decision of the next payment and three year follow-up package that was postponed until early July, has extended the fiscal misery Greece.

Greek PM says he plans to hold a referendum at the end of the year to change the constitution with the aim of addressing the root causes of Greece's debt crisis. Papandreou headed to Brussels today to meet President Herman Van Rompuy European Union and European Commission President Jose Barroso. Greek crisis will dominate the EU summit in Brussels on June 23 to 24.

Prospects for the second aid package to prevent the first default in the euro area has been decided upon last week by German Chancellor Angela Merkel to perform compulsory exchange of bonds.

Meanwhile, Ireland and Portugal have followed Greece in obtaining an emergency loan last year. Spanish financial results with investors encouraged in addition to the Spanish 10-year bonds to 261 basis points, the highest weekly close since January.

Moody's Investors Service said on June 17 might cut its rating Aa2 Italy, with 2010 debt 119 percent of gross domestic product, second highest in Europe after Greece.

The new Greek Finance Minister, Evangelos Venizelos, to come to Luxembourg with a strong commitment to cut the budget of € 78 billion that sparked street protests last week.