Juncker: Greece, euro will survive
Eurogroup chief says right measures being taken; interest rate drop, strong demand at debt auction
The eurozone will survive its debt crisis and so will its most indebted member Greece, Eurogroup Chairman Jean-Claude Juncker said on Tuesday during a visit to Athens.
Eurozone leaders aim to agree in March on a comprehensive package to draw a line under the bloc’s debt crisis, which was triggered at the end of 2009 when Greece revealed its finances were in a much more precarious state than previously thought.
“The euro will survive and Greece will be among the survivors,” Juncker told reporters, adding that Athens was taking the right austerity measures and could count on the solidarity of its partners, including an extension of the maturities of its bailout loans. Juncker also said the euro itself was not in crisis.
Tensions over what measures the eurozone needs to take to exit the debt crisis emerged at a summit last week after Germany, backed by France, proposed a competitiveness pact that includes locked debt limits and increased retirement ages.
Juncker said the two countries must detail their proposal, which has irked a number of their partners. “It is a baby you cannot love before it is born,” he said.
Prime Minister George Papandreou told the same news conference that eurozone leaders should take decisions in March, without delay.
“We are on the right path but as it was clear from the beginning, Europe has to take the necessary decisions as there were shortcomings in the eurozone’s economic governance,” he said.
Meanwhile, Greece raised 390 million euros in the auction of 26-week treasury bills on Tuesday at a lower interest rate than the previous sale.
The Public Debt Management Agency (PDMA) said the yield on the sale came in at 4.64 percent, versus 4.90 percent in the previous auction held on January 11. The amount in Tuesday's auction was oversubscribed 4.54 times. PDMA had originally been seeking to raise 300 million euros.
The cost of protecting Greek and other eurozone peripheral debt against default rose on Tuesday, with some analysts saying dissent over the competitiveness pact dampened expectations of strong measures to tackle the debt crisis.