EU Ministers Meet to Avert Greek Debt Default

2011-10-05 19

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Eurozone finance ministers meet in Luxembourg to come up with a plan to avert a Greek debt default. But European markets seem convinced a Greek default is coming.

Protesters make themselves at home in the office of Greece's Labor Minister, as they continue venting their outrage over looming public sector dismissals and other austerity measures.

The markets believe Greece will ultimately default on its debt - despite firm denials from Eurogroup President Jean-Claude Juncker, at a meeting of euro zone ministers in Luxembourg.

[Jean-Claude Juncker, President of Eurogroup]:
"We had no one advocating a default for Greece, everything will be done to avoid that and it will be avoided and nobody was advocating an exit of Greece out of the euro area."

It's not just Greeks feeling the pain - European finance ministers are considering making banks take bigger losses on Greek debt, after Athens admitted it would miss key deficit targets.

Markets received few assurances from the meeting - if anything it stoked concerns about a Greek default.

Reuters Banking Correspondent Steve Slater says everyone wants to see more action from European policy makers.

[Steve Slater, Correspondent, Reuters Banking]:
"At the moment, they seem to be dithering on Greece and a lot of other issues and haven't really come up with anything concrete to reassure people, and the banks in particular."

The ministers said a vital 8 billion euro payment to Greece would be delayed until mid-November.

Hopes that the European Central Bank might play a role in increasing the clout of the euro zone bailout fund have also been watered down.

[Jean-Claude Juncker, President of Eurogroup]:
"As far as the involvement of the ECB is concerned, I don't think that this will be the main avenue of our considerations."...