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President Barack Obama shakes hands with Chancellor Angela Merkel of Germany following her remarks during the State Arrival Ceremony on the South Lawn of the White House, June 7, 2011.
Greece: The German government has proposed that Greece offer all holders of its
sovereign bonds a 7-year extension of maturities as a condition of more
financial aid from the EU's rescue fund, Wolfgang Schäuble, finance minister,
said in a letter to his European Union colleagues, the International
Monetary Fund and the ECB, which was published on Wednesday.
Schäuble was in Washington DC on Tuesday where Chancellor Angela Merkel was
on a state visit to the United States.
“Any additional financial support for Greece has to involve a fair burden
sharing between taxpayers and private investors and has to help foster the Greek
debt sustainability,” Schäuble said in the letter.
The ECB has not yet responded but Jean-Claude
Trichet, the president, has said that he would be prepared to accept a
scheme in which financial institutions in Europe were asked to maintain
their level of outstanding credit to Greece.
"That is something, which is not a default, that the European Central
Bank would consider appropriate," he said.
The EU is seeking to avoid a "credit event" that would trigger
payments of credit default swaps or insurance contracts on Greek debt,
which would reward speculators against Greece.
The guidelines of the International Swaps and Derivatives Association,
sets out the conditions, which determines whether credit events have taken
place, and according to Reuters that while changing the terms of existing
bonds is a credit event, an exchange of bonds for new ones with new terms is
Also, the ECB, is holding €45bn worth of Greek
government bonds, which it purchased in the secondary market from last May and
it's anxious to avoid booking a loss on these bonds.
Greece has sovereign debt of about €340bn.
Greece's unemployment rate rose 16.2% in March from 15.9% in February,
the country's statistics agency said Wednesday. The total number of Greeks
unemployed was 811,340, up 40% from a year earlier, when the unemployment
rate was 11.6%.
Also today in Athens, it's reported that about 300 radiology technicians
became the latest group to protest in Athens. The technicians were
protesting cuts to extra time off they receive due to their exposure to
radiation at work.
Wolfgang Schäuble in the letter asks other Eurozone finance ministers to use
their June 20 meeting to give Greece, and possibly the International
Monetary Fund, a “clear mandate” to initiate the process of involving
owners of Greek sovereign bonds.
Should the Eurozone fail to reach
agreement on new payments to Greece by mid-July “we face the real risk of
the first unorderly default within the Eurozone,” Schäuble said in the
"We think that America’s economic growth depends on a sensible resolution
of this issue,” President Obama said at a joint news conference with
Chancellor Merkel in Washington yesterday.
Gulf states led by Saudi Arabia, the world's top exporter, had been pushing to
raise quotas by 1m to 1.5mn barrels a day in response to triple-digit oil
prices, the loss of Libyan exports and projections for continued economic growth
during the second half of the year.
Last month, the International Energy Agency, the energy watchdog of 28
industrialised countries including Ireland, hinted that supplies could be
released from strategic reserves if producers did not raise output.
Pfizer: The Wall Street Journal reports that Pfizer is looking for
$1bn in extra yearly cost cuts on top of the billions of dollars in cuts to
research and development that it was already making, according to people
familiar with the matter.
In New York Wednesday, the Dow
fell 11 points or 0.09% to 12,060.
The S&P 500 slid 0.22% and the Nasdaq dipped 0.47%.