Europe Fails To Reach A Deal On Greece

Europe Fails To Reach A Deal On Greece

European finance ministers failed during their meeting in Brussels yesterday to agree on a debt-reduction package for Greece, after hours of negotiations with the biggest lenders, Germany and the International Monetary Fund (IMF).

It looks like the praise received by the Greek government on the adopted reforms and austerity measures was not enough for Germany or the International Monetary Fund to create a package of new financial aid for Greece, especially as the deficit is expected to reach 190% of the GDP by 2014.

Finance ministers failed to find other funding sources for Greece after Germany was not convinced. Germany is the biggest lender for Greece, and this prompted the finance ministers to postpone the decision to the next meeting on December 26.

The only progress that has been made is the one Luxembourg’s Prime Minister pointed out, and that is agreeing on a number of initiatives that would contribute significantly in helping Greece.

The euro dropped after the decision, as many hopes were hanged on this meeting. The euro fell to 1.2735 from the opening at 1.2821 and much lower than yesterday’s levels at 1.2828 before the outcome of the meeting was known.