Rush is On to Save Greece

Posted June 17th, 2011 at 1:40 pm (UTC-5)
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Politicians both inside and outside Greece are scrambling to rescue the debt-ridden country, hoping to make sure it does not drag Europe into an even larger economic crisis.

France and Germany set aside key differences Friday, promising a new rescue package would be completed as soon as possible.

Their agreement came as Greek Prime Minister George Papandreou appointed a new finance minister — part of a Cabinet shake-up designed to ensure the approval of controversial budget cuts.

The Greek government's proposed austerity measures have sparked weeks of protests and prompted two members of Mr. Papandreou's party to resign from parliament. New Finance Minister Evangelos Venizelos compared taking the job to going to war, telling the Greek people “the country must be saved and will be saved.”

Passage of the austerity measures are a condition of last year's $160-billion bailout from the European Union and International Monetary Fund.

Officials and investors fear any failure by Greece to pay off its debt will spark a larger crisis and send the value of the euro plunging. Many also say the original bailout will not be enough to shepherd Greece through the crisis.

Following a meeting with German Chancellor Angela Merkel in Berlin Friday, French President Nicolas Sarkozy warned, “There is no time to lose.”

The two countries had been divided over whether banks and investors should be forced to contribute to any new rescue. But Germany now says their participation is voluntary.

European Union economic chief Olli Rehn said Thursday he is confident eurozone ministers will grant a $17-billion loan payment to Greece to prevent Athens from defaulting on its debt.