The economic ministers of the Eurozone, after a long meeting that lasted until late in the evening, announced new measures against the risk of contagion from the financial crisis. Jean-Claude Junker, president of the Eurogroup, declared that it is necessary to "lighten the weight" of the public debt of the states at risk of default, primarily that of Greece.
The formula to adopt envisages first of all a reduction in the interest rates paid by these countries. Furthermore, the deadlines for repayments to creditors must be extended; finally, it is necessary for the EFSF, the European financial stability fund, to be able to intervene on the secondary bond market either directly, by purchasing government bonds of countries put under pressure by the risk of contagion or indirectly by lending them the necessary funds to buy back their bonds, the so-called buy-back.
Olli Rehn, the commissioner for economic and monetary affairs, confirmed that the decision on increasing the flexibility and scope of the EFSF will be taken "soon" and that it will be assessed which of the two options is the more significant.
The Eurogroup is keen to underline its "absolute commitment to safeguarding the financial stability of the Eurozone" and confirms a second wave of aid to Greece which will see the involvement of the private sector.
As far as our country is concerned, Junker said he was aware of the fact that Italy, but not only Italy, was targeted by the financial markets, but he reiterated that these new measures aim to offer an adequate response. The president also declared that Italy was not the subject of discussion: "We didn't have to deal in particular with what you call the Italian case".
The 27 finance ministers of the European Union will meet in Brussels today to discuss these issues and the bank stress tests which will be announced later this week. Also, as he requested Michel Barnier yesterday, European commissioner responsible for the internal market, one theme of the Ecofin day will be the rating agencies and their modus operandi in the EU.
