SHARE
COPY LINK

ECONOMY

France: we will strive to rescue Greece

The finance ministers of Germany and France pledged on Tuesday to do everything possible to ensure a Greek rescue plan can be sealed next month, and to save the 17-nation eurozone.

Asked about Greece's long-delayed payment of debt rescue funds, France's Pierre Moscovici said: "We still want a comprehensive solution in the month of November to put an end to the uncertainty (in the eurozone) and we will do everything in our power to succeed."

Germany's Wolfgang Schaüble added: "We will do everything France and Germany can to restore lasting confidence in the common European currency."

The ministers had attended a conference in Berlin called "Europe Beyond the Crisis" and then held talks on the sidelines.

On Wednesday eurozone finance ministers – the Eurogroup – will hold a conference call on Greece to examine its progress in meeting economic targets set to unblock a vital €31.2-billion ($40.4 billion) instalment of aid.

They are also to discuss Greece's request for a two-year extension to implement the tough austerity measures that are part of its bailout package, which would make the new deadline 2016.

The extension would further increase the huge cost of Greece's bailout package by €30 billion, according to a European source.

Greece has been locked in negotiations with the so-called troika of auditors representing its EU, International Monetary Fund and European Central Bank creditors over a €13.5-billion austerity package.

Approval of the package is necessary for Greece to receive the next instalment of its multi-billion rescue loans, as the prime minister has said the country's money will run out on November 16.

Moscovici assured Athens of the support of the two top economies in the eurozone.

"We share a dual determination: the determination for Greece to stay in the eurozone and the determination as well for Greece to carry out the necessary reforms so that the eurozone can remain intact as a result of its own efforts," Moscovici said, flanked by Schaeuble.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

SHOW COMMENTS