THE EUROZONE is preparing a crackdown on London-based market speculators that “abuse” credit default swaps, Greek Prime Minister George Papandreou said yesterday after talks with the French president.
Speaking after a meeting with President Nicolas Sarkozy, Papandreou said that France, Germany and Eurogroup chairman Jean-Claude Juncker would unveil new measures to tackle speculators within the next few days.
“There will be an initiative on CDSs from the three countries in cooperation with Eurogroup president Juncker,” said Papandreou, who has long-blamed CDS speculators for his country’s financial woes.
“Tomorrow or the day after you will know about it. It is an initiative aimed at finding a solution to the speculators,” he added, saying he would seek US support for the move when he meets President Barack Obama next week.
The meeting came after Papandreou received a pledge of support but no promise of concrete aid in talks with German chancellor Angela Merkel in Berlin on Friday.
The Greek premier is likely to have found a sympathetic shoulder to cry on in Sarkozy, who threw his support behind the country at the weekend.
“If we created the euro, we cannot let a country fall that is in the eurozone,” Sarkozy said. “The euro has no sense if there is no solidarity.”
Papandreou’s charm offensive comes amid violent protests in Athens, where hordes of striking protesters clashed with riot police last week over the latest austerity measures, which include cuts to public sector pay and pensions, as well as tax increases on tobacco, alcohol and luxury goods.
Papandreou insists Greece is not seeking financial aid from the eurozone but has said he wants help to combat speculators using credit default swaps on the international markets to profit from Greece’s distress.
Meanwhile, Germany threw its weight behind a new “European Monetary Fund” that would bail out troubled nations in the eurozone, in a sign of how the Greek crisis is forcing the single currency bloc to redesign its institutions.
Finance minister Wolfgang Schäuble said he would table proposals for a new eurozone institution that had similar “powers of intervention” to the International Monetary Fund.