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World stock markets rallied today as the German government continued “intense” talks over a bailout of the stricken Greek economy.
Greek bonds staged their biggest leap for well over a decade in the hope the rescue could be finalised as early as tonight.
EU sources said negotiations were ongoing although the size and precise structure of the package had not been decided.
An urgent teleconference this afternoon of European finance ministers was expected to thrash out which countries would take part, with Germany taking the lead.
Greek bonds have plummeted further than any other government debt this year on concerns prime minister George Papandreou will be unable to cut the vast budget deficit. Today, unions were striking at his austerity packages.
The crisis has triggered fears that investors will flee Greek assets and destabilise the rest of the eurozone.
Philipp Musil, fund manager at Constantia Privatbank in Vienna said: “Reassurance has arrived. A comment from a decision-maker has long been awaited.”
The crisis has brought to the fore arguments of eurosceptics that the single currency leaves the continent's strongest economies shackled to the deficit problems of its weakest.
Reader views (3)
Greece is in no worse state than Britain is.
But had Greece been able to print money the problem would have not surfaced at the moment. It would have been temporarily surpressed like in the UK.
- John Smith, London UK, 10/02/2010 15:00
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Funny that the German's are so up for a resucue. I wonder which nations banks hld the bulk of Greek Gov Bonds? Perhaps the drive for support at government level avoids another domestic bank bailout?
- Steve, essex, 10/02/2010 13:34
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Is the UK next for a bailout or will we continue to print money ?, apparently our situation is worse than the Greeks,
- Mr S.Port, London, 10/02/2010 13:00
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