EU Calling for More Unity in Debt Crisis

Posted September 28th, 2011 at 5:45 pm (UTC-5)
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The European Union is calling for more unity to deal with the continent’s debt crisis.

European Commission President Jose Manuel Barroso says the crisis is a test of Europe’s ability to respond to a challenge and more discipline is needed among the 17 nations that use the euro currency.

He predicted debt-plagued Greece would remain in the eurozone even as it struggles to carry out austerity measures aimed at cutting the its massive debt.

The Greek Parliament approved a controversial new property tax Tuesday, trying to show its lenders that Greece is committed to economic reform.

But Deputy Prime Minister Theodoros Pangalos said on Greek television Wednesday that Greeks are exhausted by taxes.

Inspectors from the European Union, European Central Bank, and International Monetary Fund are in Athens looking at Greek efforts to slash its huge debt. The inspectors will recommend whether Greece is to get another installment of last year’s $159-billion bailout.

Greece says it will default on his debts without the loan payment, which could have devastating consequences for the global economy.

Greek Prime Minister George Papandreou told German business leaders Wednesday that he can guarantee Greece will live up to its financial commitments made to its creditors. Mr. Papandreou predicted his country will emerge from the current debt crisis and return to growth and prosperity.

Thursday, Germany’s parliament plans to vote on whether to increase the continent’s bailout fund to $593 billion. Seven other EU countries have also yet to ratify the agreement. German Chancellor Angela Merkel faces opposition by some fellow conservatives over the size of the fund.

But some financial experts say even $593 billion is too small. They say the fund needs several-trillion dollars, to deal with Greece’s debt woes, bailouts for Ireland and Portugal, and possible help for Italy and Spain.