France and Germany in a joint statement on Friday, pledged to do everything they can to protect the eurozone in wake of the threats posed to the very existence of the 17-nation single currency bloc by the sovereign debt problems faced by several member countries.
The statement from the two leaders follow a similar assurance from European Central Bank President Mario Draghi yesterday. Mario Draghi, addressing an investment conference in London on Thursday, said the central bank is prepared to take whatever it takes to preserve the euro and act on rising bond yields. His remarks, coupled with the Franco-German joint statement, has raised hopes of more EU action to ease the ongoing debt crisis in the eurozone.
In a joint declaration issued in Berlin, German Chancellor Angela Merkel and French President Francois Hollande said their countries were "deeply committed to the integrity of the eurozone" and pledged to do everything in their power "to protect" the single currency bloc from collapsing.
"In order to achieve this, the (eurozone) member states and European institutions, must live up to their respective responsibilities. Both countries stress the necessity to implement quickly the conclusions of the European Council" in late June, they added.
Notably, Germany and France are the eurozone's two biggest economies as well as the biggest contributors to the bailout funds, giving them a greater say in matters related to the strategy aimed at pulling the bloc out of the crisis.
Their joint statement came as Greek Prime Minister Antonis Samaras was meeting the so-called troika of international creditors, namely the European Commission, the European Central Bank and the IMF, in an effort to convince them to release Athens' final installment of bailout money and relax some of the earlier agreed bailout conditions.
Greece had agreed in March to implement further austerity programs demanded in exchange for a joint EUR 130 billion bailout from the EU, the ECB and the IMF. In addition, Greece had earlier availed a joint EU-IMF 110-billion-euro rescue loan in May 2010. Despite availing the bailout packages, there are widespread doubts about Greece's future in the eurozone as well as Athens' ability and commitment to honor the austerity pledges made to secure the loans.
In return for these two loans, Greece had agreed to implement painful and hugely unpopular austerity measures, including reduction of government spending, slashing of public sector jobs, pension reforms, privatization of loss-making government-owned companies as well as increasing existing taxes and enforcing new ones.
Nevertheless, Samaras said earlier this week that his government would do everything it can to get Greece back on track and ensure its continued presence in the eurozone. He also announced plans to implement a 11.7 billion euro cost-cutting plan over the next two years, which reportedly includes further reductions in pension, benefits and healthcare spending.
In addition to Greece, Portugal and Ireland have also availed bailout loans to shore up their ailing economies. Cyprus has initiated procedures for securing a bailout loan, while Spain and Italy are facing high borrowing costs amidst concerns over their struggling economies.
by RTT Staff Writer
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