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No plan yet says euro zone

Monday, September 26, 2011 - 02:19

Sept.26 - Euro zone officials play down reports of emerging plans to halve Greece's debt and recapitalise European banks, amid global pressure to take more decisive action. Kirsty Basset reports

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The world's financial leaders may have spent the weekend discussing global debt problems but there's still no clear way forward and doubts over Europe's ability to stop the crisis are spreading. Jan Randolph, head of Sovereign Risk at IHS Global Insight says while everyone agrees on the problem - too much debt - there's disagreement on how to move forward. (SOUNDBITE)(English) JAN RANDOPLH, HEAD OF SOVEREIGN RISK AT IHS GLOBAL INSIGHT SAYING: "It boils down to an argument between the Germans and the Americans on how to deal with this. The Germans say what's absolutely necessary is closing these fiscal balances that are causing the higher debt levels on the public side. So austerity comes first, and the UK agrees with that. The Americans believe growth is more important. Really, both are needed." With Greece getting closer to default policymakers are said to be exploring a number of options to shore up the euro zone. These are said to include halving Greece's debts and recapitalising Europe's banks. Strengthening Europe's bailout fund - the EFSF - is also on the cards, but opinion varies on how best to do this - and the details are yet to be worked out. (SOUNDBITE)(English) JAN RANDOPLH, HEAD OF SOVEREIGN RISK AT IHS GLOBAL INSIGHT SAYING: "The larger that fund is the better because it will give assurances that there is enough money there ultimately for recapitalisation, shoring up the European banking system, and that will provide confidence." Euro zone officials have played down the speculation - calling it "highly premature." But Greeks in particular want a swift solution. Strikes continue as the country implements more cuts in order to qualify for another bailout cheque - to avoid default next month. European leaders are also running out of time, warned World Bank President Robert Zoellick. (SOUNDBITE) (English) WORLD BANK PRESIDENT ROBERT ZOELLICK SAYING: "Failure to take decisive action in Europe and the United States may shake the entire global economy, throwing developing countries off track - and they are today's engine of global growth." Euro zone members have vowed to do "whatever is necessary" to stabilise financial markets - but officials have tried to dampen speculation on what course they'll take. Kirsty Basset, Reuters.

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No plan yet says euro zone

Monday, September 26, 2011 - 02:19