Wednesday, July 27, 2011

EU's Greek deal no turning point, but perhaps first step

July 27, 2011

The European Union's latest rescue package for Greece should not be seen as a turning point from which the euro zone debt crisis will start to be resolved, but simply a step in the right direction, a Reuters poll of economists showed.

While heralded by Europe's government heads as a new sign of determination to stem the crisis, a firm majority of analysts -- 31 out of 50 -- were unwilling to back the view that t he latest accord would necessarily mark a turning of the tide.

Euro zone leaders agreed last week to send an extra 109 billion euros ($158 billion) to Athens, while approving broad new powers for their financial rescue fund to prevent ma rket instability spreading.

Most economists surveyed this week instead said the package was just one of many measures that may be needed to quell the sovereign debt crisis that has also overcome Ireland and Portugal, while threatening to drag down heavyweight economies like Spain and Italy.


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