Bloomberg reports that Greek Prime Minister George Papandreou has called for a clear rescue mechanism for Greece and has set a one-week deadline for the EU to come up with a lending facility, challenging Germany to give up its doubts about endorsing a debt guarantee or loan package for Greece.
Bloomberg: “It’s an opportunity to make a decision next week at the summit,” Papandreou told reporters in Brussels today. “This is an opportunity we should not miss. When you have that instrument in place, that could be enough to tell the markets hands off, no speculation, let this country do what it’s doing.”
Greece pinned its hopes on the Brussels summit as German officials voiced qualms about an EU-led rescue, potentially backtracking on a commitment hammered out by finance ministers just three days ago. Greek bonds and the euro fell.
Greece, which was brought to a standstill on March 11 by the second general strike this year, needs to raise about 10 billion euros ($14 billion) to refinance bonds that come due on April 20 and May 19. Papandreou said Greece cannot afford to keep paying current market rates.
Mr. Papandreou, who last week lashed out at Brussels saying his country had become a “guinea pig” for squabbling eurocracts playing power games, and that Europe’s own credibility was on the line, said he may turn to the International Monetary Fund to overcome his country’s debt crisis.
Meanwhile, the mood has been soured further by comments made by the head of Germany’s Ifo economic research institute who on Thursday said the best way to solve the Greek debt crisis is for the country to leave the eurozone and devalue its currency.
iMarketNews:”This would be cheaper [for the other Eurozone countries] then to permanently finance Greece,” Sinn said.