Barroso: 2nd Bailout Prevents Uncontrolled Greek Default

Finance | February 21, 2012, Tuesday // 15:46|  views

EC President Barroso has welcomed the second EU bailout for Greece. Photo by EPA/BGNES

EC President Jose Manuel Barroso has praised the agreement in the Eurogroup on the second financial assistance program for Greece, which is worth EUR 130 B, and was reached late on Monday.

"The agreement reached in the Eurogroup on a second financial assistance program for Greece is an essential step forward for the country and for the euro area as a whole, Barroso declared Tuesday, at a press point following his meeting with Edmund Stoiber, Chairman of the High-Level Group on Administrative Burden Reduction.

"Together with the agreement reached with the private sector for a bond exchange offer, in which I am very confident a high number of private sector bondholders will participate, this overall package opens the way for Greece to construct a new and more sustainable economy, better able to generate growth and jobs. It also closes the door on a scenario of an uncontrolled default, with all its grave economic and social implications. That would be - to use the word of the Greek Prime Minister - chaos for Greece and for the Greek people," the EC President said.

"I am profoundly aware of the heavy burden that the Greek people are having to bear and I recognize the tremendous efforts made over the past two years, in extremely challenges circumstances. Nevertheless, as recognized by the Greek authorities themselves, not only the Government but also the Parliament, the measures being taken are essential and in many cases long overdue. There is no alternative to fiscal consolidation and to structural reform in Greece if Greece wants to regain competitiveness so it can generate again growth and jobs. I think that this message has to be clear. And the best way of showing our solidarity to Greece is to speak the truth," he added.

In his words, the second bailout will intensify the many ambitious structural reforms underway, which are helping to build a more modern and citizen-friendly public administration, a fairer and more effective tax system and a more friendly business environment in which employment can flourish: "In sum: a more competitive Greek economy."

The Commission will in parallel continue to provide immediate and proactive support, through a reinforcement of the Task Force for Greece established last summer, the full mobilization of cohesion funding and through the Youth Unemployment Action Team, which will be on the ground in Athens next week, the EC chief promised.

Barroso stressed the fact that the rest of the euro area has at the end agreed with the bailout program.

"I know that in some governments it is sometimes difficult to get the necessary support from their parliaments but I want to congratulate the finance ministers for their work because it was the right decision for Greece but also for the euro area. It is a welcome signal that our common goal is for a stable and prosperous Greece with a secure future in the euro," he said.

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Tags: greece, debt crisis, debt crises, Greece debt crisis, default, Eurogroup, euro zone, Eurozone, Euro Area, bailout, bailout loan, bail-out, EC, EU, European Commission, EC President, Jose Manuel Barroso


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