Greece, Germany, France to talk on crisis: Greek source

13th September 2011, Comments 0 comments

Greek Prime Minister George Papandreou will hold a teleconference on Wednesday with German Chancellor Angela Merkel and French President Nicolas Sarkozy on his nation's debt crisis, a Greek official said on Tuesday.

"The teleconference was decided in view of the upcoming EU meeting in Poland," the official told AFP, referring to the informal talks between EU and eurozone finance ministers and central bankers in Wroclaw on September 16-17.

The meeting is held with markets in turmoil on rising fears of the insolvency of Greece or even an inglorious exit from the eurozone, stemming from its ongoing troubles to apply an EU-IMF recovery plan.

Papandreou had earlier conferred with former European Central Bank vice-president Lucas Papademos, reports said.

Athens has been warned that failure to overhaul its economy could cost vital funds out of an 110-billion-euro ($150-billion) EU-IMF bailout that rescued it from bankruptcy last year.

A new 159-billion-euro lifeline from the EU currently hangs in the balance as well, with a number of eurozone members expressing frustration with the Greek government's delay in enacting and implementing agreed reforms.

And there is uncertainty whether enough banks will express interest in an initiative to ease Greece's huge debt burden by agreeing to exchange maturing bonds with longer-term obligations.

The Wroclaw talks could prove decisive in breaking deadlock in Europe over a demand for Greek collateral made by Finland as a condition for approving the new EU bailout, over the objections of other eurozone nations.

Merkel earlier sought to ease fears over Greece, saying the 17-country eurozone had to stick together and that an "uncontrolled insolvency" must be avoided.

She also urged officials to choose their words cautiously, after markets went into free fall Monday after comments from German policymakers that an orderly insolvency for Greece or even a eurozone exit was possible.

© 2011 AFP

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