In a recent statement, Jean-Claude Trichet, president of the European Central Bank, warned that swift action was needed to help Greece with the already approved second economic bailout for Greece. The Eurozone approved the bailout on 21 July but it was to be held for sometime in September which is just around the corner.
Trichet isn’t the only official calling for swift action as his sentiments echo those of President Jose Manuel Barroso, of the European Commission. Unfortunately, it is unlikely that any swift action will be taken as legislators are just now returning to their posts.
There are other problems on the horizon for the bailout besides members being away on summer holiday. For example, Finland has insisted on some form of security/collateral for their loan. In talks with Germany, Finnish officials felt that perhaps a compromise could be worked out. They remain optimistic that meeting the timetable is still possible.
Other officials such as the Prime Minister of Luxembourg felt that the question of collateral would not hinder the bailout. There is a proposal in the works that Luxembourg’s Prime Minister, Jean Claude-Juncker felt woud be met with approval by all member states of the Eurozone.
Another aspect to be considered is the fact that the Athens stock exchange has seen major losses of late. This means that the devaluation of certain assets which had been allocated for privatisation is a major concern to be added to the already complex worries.
Even so, the European Commission expects that the Eurozone will have grown by 1.8% in 2011. However, since the economy and the financial sector are in synch, some are now concerned that greater turbulence will ensue in the financial world which will put a halt to the economic recovery realised thus far in the Eurozone as a whole.
