Belfast Telegraph

Imminent Greece deal helps Euro rally

By Geoff Meade

The Euro staged a mini-recovery as European negotiators signalled a bail-out deal to rescue the Greek economy is just days away.

The single currency showed gains against the dollar, raising hopes that the impending €45bn accord would work its magic, ease the Greek debt crisis and restore the currency's credibility.

European monetary affairs Commissioner Olli Rehn, helping broker the joint European Union-International Monetary Fund rescue package, said: "I am confident that the talks will be concluded in the next (few) days."

He added: "The financial support will give Greece a sufficient breathing space from the pressures of the financial markets to decisively restore the sustainability of its public finances and to put the economy back on a path of sustainable growth."

He stressed the controversial deal was not just for the benefit of Greece, but "for all Euro-area member states and their citizens to safeguard financial stability in Europe and globally, which is absolutely crucial for our economic recovery, steady growth and employment".

Mr Rehn said the Commission, the IMF and the European Central Bank was still working with the Greek Government "to work out a programme that will reverse the debt spiral of Greece and restore its overall economic competitiveness".

German Chancellor Angela Merkel was still considering whether or not to give her approval to the plan, which would involve Germany as the biggest individual contributor.

In the face of a sensitive regional election on May 9, she is trying to appease an irate electorate by demanding tough new economic reforms from the Greek Government before agreeing the terms of the loan deal. Her task has not been made any easier by a senior German minister's speculation that any loans to Greece will never be repaid, and will have to be written off.

Athens is already facing a growing public backlash over the austerity measures it has introduced so far in a bid to slash its deficit and revive faith in its economy and the Euro.

Meanwhile European Trade Union Confederation general secretary John Monks has urged action against "the wave of financial speculation that is hitting Greece and now contaminating other Euro area member states".

Athens needs about €11.5bn by May 19 as a first payment to its creditors - but will still be left with debts of well over €250bn.