PM calls for EU to show greater urgency

Prime Minister George Papandreou on Wednesday turned his fire on the International Monetary Fund and the European Union in particular for failing to agree on the details of a second bailout for Greece and allowing the uncertainty within the eurozone to exacerbate the debt crisis.

Speaking to the German online edition of the Financial Times, Papandreou said that the lack of agreement within the EU over what elements would make up the new loan package for Greece due to an ongoing debate about private sector participations was having a damaging effect.

?This uncertainty is scaring off investors,? he said. ?The more decisive the signal given now? the quicker we will be able to return to the markets.?

Papandreou was due to have the chance to air his concerns about the slow pace of decision making in Europe at an emergency summit of eurozone leaders? in Brussels tomorrow but it looks as if these talks will be delayed. Sources in the Belgian capital said that the meeting might be held at the start of next week.

It appears that Germany was unhappy that European Council President Herman Van Rompuy suggested the meeting would take place without first consulting with Berlin.

Significantly, German government sources indicated yesterday that Berlin is warming to one of the ideas put forward as a way of easing the debt burden on Greece, which was for the European Financial Stability Facility (EFSF) to be bolstered and to then buy back a considerable amount of Greek bonds to allow Athens to borrow from the market at better rates.

However, concerns remain about adopting a strategy that would lead Greece to selective default. Nevertheless, there are growing calls from economists and other experts for the eurozone to move quickly to shore up Greece to prevent contagion from the debt crisis afflicting other countries, like Italy.

In an op-ed, financier George Soros said Europe?s politicians and financiers had to show more urgency. ?Yet Europe?s political establishment continues to argue that there is no alternative to the status quo,? he wrote. ?Financial authorities resort to increasingly desperate measures in order to buy time.

?But time is working against them: Two-speed Europe is driving member countries further apart. Greece is heading towards disorderly default and/or devaluation with incalculable consequences.?