“Even if the instruments to channel this solidarity are not predefined in all the details, the EU and the euro area are in a position to have these instruments.”
“Even if the instruments to channel this solidarity are not predefined in all the details, the EU and the euro area are in a position to have these instruments,” Almunia told a gathering of center-left political parties in London on Friday.
The remarks by the EU’s former economy chief come a day after Greece repeated calls for eurozone member states to provide greater details of a potential bail-out plan, saying the move would help calm markets and lower Athens’ borrowing costs this year.
At an informal summit of EU leaders Brussels last week, euro area states promised to take “determined and coordinated action if needed to safeguard financial stability in the euro area,” but markets were unimpressed by the tacit political support for a bail-out without greater clarity on how it would be achieved.
A clearly enunciated plan would help Greece reduce the costs of refinancing €53 billion in debt this year, the country’s finance minister Giorgos Papakonstantinou told Reuters on Thursday.
It would also make it easier for Greece to shrink its budget deficit by the promised four percent this year, and could even obviate the need for a bail-out package in the first place, he added.
“I’m not asking people to say exactly what is going to happen, but we need to give the assurance to markets that we are actually working toward a potential instrument … so that we will never have to use it,” he said.
Mr Papakonstantinou made a similar call in Brussels earlier this week during a meeting of EU finance ministers, but was rebuffed. A number of states, including European heavyweight Germany, are keen to avoid a bail-out if possible, fearing it could open the floodgates to other calls for help.
Instead, ministers and the European Commission are emphasising the need for Greece to rapidly cut its budget deficit, totaling 12.7 percent of GDP in 2009, and implement a list of structural reforms in order to weed out weaknesses in its real economy.
But some in Greece are already growing tired of the tough requests from its EU partners.
“How does Germany have the cheek to denounce us over our finances when it has still not paid compensation for Greece’s war victims?” Margaritis Tzimas, of the opposition conservative New Democracy party, said in an address to the Greek parliament on Thursday.
“There are still Greeks weeping for their lost brothers,” he added. Analysts warn the Greek crisis risks creating a new north-south division in Europe.
(Just a wild guess; this “instrument” wouldn’t happen to be the one they call IMF?)
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