July 20, 2011
German Chancellor Angela Merkel has defied demands for a swift agreement on a new bailout for Greece, saying Thursday's emergency summit is unlikely to produce a final deal. A panel of government economic advisers thinks that a restructuring of Greek debt is necessary.
German Chancellor Angela Merkel has dampened hopes that the special euro zone summit on the common currency crisis on Thursday will break the impasse over a second bailout for Greece. Spain and Italy, whose economies are under threat of being engulfed by the crisis, are pushing for a swift deal to calm financial markets, and senior German economic advisors joined a chorus of warnings that the survival of the single currency was at stake.
Speaking on Tuesday, Merkel said there was "a big yearning" for a "single large move -- preferably spectacular" to solve the crisis. But there won't be one, she said.
"Further steps will be necessary and not just one spectacular event which solves everything," Merkel told a joint news conference with Russian President Dmitry Medvedev. "Whoever takes political responsibility seriously knows that such a spectacular step won't happen."
The comment sent the euro down against the dollar, and follows growing criticism of Germany's hesitant response to the crisis, both in Europe and in Germany.
Spanish Prime Minister Jose Luis Rodriguez Zapatero last week warned about "negative effects" caused by the endless debate about making private sector creditors share part of the burden in the debt crisis -- a key demand voiced by Germany.
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