Barroso calls for ECB to aid eurozone
European Commission President Jose Manuel Barroso has called on the European Central Bank to do everything in its power to maintain the eurozone’s financial stability, saying the EU faced the biggest challenge in its 50-year history.
In his annual “State of the Union” speech to the European Parliament Barroso set out a range of steps needed to control the eurozone’s 20-month debt crisis, including rapid approval of its July agreement to expand the EFSF bailout fund.
But German chancellor Angela Merkel suggested that Greece’s planned second €109bn (£94.7bn) bailout may have to be renegotiated, as inspectors from the troika of international lenders travelled to Athens to inspect its latest, deeper austerity plans.
Greece’s Socialist government is accelerating its debt strategy to meet the terms of an International Monetary Fund and European Union rescue deal so it can receive a new loan next month and avoid defaulting on its debt.
The troika inspectors, from the EU, International Monetary Fund and European Central Bank will start talks tomorrow on the plans to deepen budget cuts and raise taxes after they threatened to cut off aid if Athens did not take action faster.
Merkel suggested that parts of Greece’s planned second rescue could be reopened, depending on the outcome of the troika’s audit.
“We have to wait and see what the troika … finds and what it will tell us (whether) we will have to renegotiate or not,” she told Greek state television NET.
Several hundred activists affiliated with the Greek Communists have converged on the finance ministry waving a banner saying: “We won’t pay”, in protest against a new one-off income tax introduced this summer.
Wide areas of the country have also been hit by transport strikes.