EU Chiefs Signal Greek Austerity Softening

European governments signaled a willingness to relent on Greece’s austerity measures as leaders turn from an election victory by Greek bailout proponents to focus on safeguarding the other 98 percent of the euro economy.

Greece’s new government must emerge “swiftly” from yesterday’s contest, which showed pro-bailout New Democracy in a position to form a coalition, euro finance chiefs said in a statement. German Foreign Minister Guido Westerwelle said negotiators could consider giving Greece more time to fix its finances, telling ZDF television that the political gridlock over the past six weeks “has done damage.”

Greece’s international monitors will “return to Athens as soon as a new government is in place to exchange views with the new government on the way forward,” the finance ministers said in the statement. They want “the swift formation of a new Greek government that will take ownership of the adjustment program.”

The election result in the country where the debt crisis began in 2009 paves the way for euro leaders’ fourth make-or- break summit in a year. While Chancellor Angela Merkel warned global leaders last week that Germany rejected what she called quick-fix management of the crisis, a softening of the terms of Greece’s bailout may provide a template for how euro leaders overcome policy differences.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell