Monday, May 16, 2011

EU to hold talks on Greek debt

European Union finance leaders are to discuss Greece's debt problem

Source: Press TV

Finance ministers of the European Union are expected to hold talks on Greece's debt-ridden economy, as it continues to expand beyond predictions.

The EU warned of Greece's already massive debt expanding at a much faster pace than forecasted, as its leaders are due to discuss further possible solutions for the troubled Greek economy in Brussels, AP reported.

This month's talks were thought to be primarily on an aid package Portugal had received. However, Greece's swelling debt and its failure to restore investor confidence after receiving a $158 billion loan from the International Monetary Fund (IMF) and the EU has raised the union's concern.

Some EU officials have recently suggested a second bailout for Greece in order to cover financial shortcomings in 2012 and 2013, while some other EU members have also suggested that Greece sell property in order to reduce its debt.

EU financial leaders are recommending even further austerity measures and financial reforms by the Greek government.

This comes as the 62 year-old IMF Director General Dominique Strauss-Kahn was arrested on Saturday on charges of attempted rape against a female hotel employee in New York. Strauss-Kahn was expected to participate in the meetings.

The European Union and the International Monetary Fund granted a EUR110 billion ($158-billion) bailout to the troubled state in 2010.

The bailout loan saved Greece from the brink of default. However, Athens was obliged to implement a strict austerity package, including the cutting of public sector salary and pensions, increasing taxes and overhauling the pension system, to survive.

As a consequence Greece has been witnessing a series of protests following the government's proposal of a new program to cut 26 billion euros over the next three years in attempts to cut the country's debt.

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