ECONOMY

Talk grows of EU bailout for Greece

Speculation that the European Union is preparing a package to help Greece tackle its fiscal problems intensified yesterday, paving the way for a rebound of badly battered Greek bonds and stocks. A senior German ruling coalition source was cited late yesterday saying that eurozone countries have decided in principle to help debt-stricken Greece. Greek bonds jumped earlier as European Central Bank (ECB) President Jean-Claude Trichet’s early return from an Australian meeting stoked speculation that policymakers will announce assistance for the nation. Trichet was expected to leave a gathering of policymakers in Sydney a day early yesterday to attend tomorrow’s EU summit in Brussels. An ECB source said that Trichet had always intended to attend the summit and that the new flight departure time did not reflect any change in his plans. Market players expect Greece to dominate talks amid growing concern that other so-called peripheral eurozone economies cannot deal with their debts and deficits. «This meeting of EU leaders is set to discuss the economic road map of the eurozone for the next 10 years; however it is difficult to see how the problems of Greece and other vulnerable indebted nations won’t overshadow the summit,» Michael Hewson, analyst at CMC Markets, told The Associated Press. Greek 10-year bond yields slid 41 basis points to 6.36 percent after earlier falling 43 basis points. The premium demanded by investors to hold the securities instead of benchmark Bunds narrowed 43 basis points to 320 basis points. Shares on the Athens bourse rallied yesterday, jumping nearly 5 percent after tumbling 3.86 percent on Monday. The euro also rose the most in almost a month against the dollar on speculation of Greece being helped out. The senior German ruling coalition source told Reuters that a «decision on help for Greece has been taken in principle within the eurozone.» Various options were being considered and no decision had yet been taken, the source added.