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Demands for Greek bailout revision grow

Tuesday, June 19, 2012 - 02:12

June 19 - Calls are growing for Greece's bailout conditions to be re-negotiated by the new government as they no longer apply to the economic reality in the country. Sonia Legg reports.

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Global markets may not be too impressed with Europe's attempts to solve the debt crisis but Greece has bucked the trend. Shares have been up since voters elected a pro-austerity leader and yields on Greece's three-month debt - its sole source of market funding - have eased. But temporary market relief won't solve Greece's underlying problems says economist Yanis Varoufakis. (SOUNDBITE)(English) ECONOMIST YANIS VAROUFAKIS SAYING: "The current bailout terms and conditions have already been bypassed by economic reality, so every prediction and every hypothesis on which they were founded, those conditions have completely gone to the dogs." It appears that's now been accepted by the euro zone. A senior official said the bailout terms were "changeable" and could be "adapted" despite comments to the contrary from the German Chancellor at the G20 meeting. (SOUNDBITE)(English) ECONOMIST YANIS VAROUFAKIS SAYING: "Germany constantly says 'Nein, Nein, Nein' (No, No, No) and then they say 'Ja' (Yes) at the moment when the whole thing is about to implode and go belly up. Unfortunately they will buckle and they will loosen up the terms and conditions of the bailout. The reason why I'm saying 'unfortunately' is because the problem with the bailout terms and conditions is not the magnitude, it's not the dosage of the medicine, it's the medicine itself. " Antonis Samaras - who won Sunday's election in Greece - says he's in favour of a renegotiation. The US also says it supports discussions about a review. But talks about talks is proving frustrating for some. (SOUNDBITE)(English) ECONOMIST YANIS VAROUFAKIS SAYING: "For two years now the euro zone, our European great and good, have been making great pronouncements about what we do, but what they actually do is nothing. What they need to do is, they need to end this nexus, between the banking bankruptcy and the state bankruptcy, and then immediately mutualise part of the debt and on top of that have an investment-led recovery programme involving the European Investment Bank in association with the European Central Bank. Unless we do those things there will be no euro zone to speak of." It's not the first time Europe's leaders have heard warnings like that. With another "key" summit taking place next week - many are hoping this time they will agree on a solution. Sonia Legg, Reports.

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Demands for Greek bailout revision grow

Tuesday, June 19, 2012 - 02:12