LEADERS of the eurozone must reform their economies to save the bloc from another explosive crisis, the chief of the European Central Bank (ECB) said today.
Mario Draghi urged euro leaders to make changes to labour markets, as the bloc’s economy continues to struggle with low growth and high unemployment.
The chief said ageing populations are a huge problem for the jobs market that will start to hack away at the eurozone’s potential in the coming years.
In a showdown over the fate of Greece, Europe’s most powerful figures have descended on Brussels to make a long overdue decision over a bailout package for Athens in crisis talks this evening.
The move raised hopes that an imminent Greek exit from the euro could be averted by an agreement to continue international bailout funding for a further six months.
In a statement the Eurogroup said: “The Eurogroup broadly welcomed a new version of the reform plan submitted by the Greek authorities this morning, before the Eurogroup meeting, and considered it to be a positive step in the process.”
As oft stated here, Greece will not leave the union and it’s all leading back to Berlin, the world’s next superpower, who runs the show on the continent. Worst case scenario: There could be a compromise entailing a two tier currency system that allows regional states to retain their economic sovereignty to some degree — or at least they would think.
Such an idea already has backing from Angela Merkel and if the crisis deepens — because it’s not going to magically go away — look for ideas like these to gain even more traction and possibly become reality. ‘Eurobonds‘ were also another scenario.
For further info on a plausible two tier currency system, please see the following posts:
Greece’s last-ditch attempt to get desperately-needed funds from its euro zone neighbors failed on Wednesday, but the country appears eternally optimistic that a list of reforms — as yet to materialize — will unlock vital aid.
Greece appealed for the European Financial Stability Facility (EFSF) to return 1.2 billion euros ($1.32 billion) it said it had overpaid when it transferred bonds intended for bank recapitalization back to the fund this month, Reuters reported Wednesday.
However, euro zone officials ruled that Greece was not legally entitled to the money, the news wire said. Continue reading