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Europe moves to restore Greek funding

Thursday, July 16, 2015 - 01:58

European shares hit a six-month high after the Greek parliament approved a stringent bailout programme amid the worst protest violence this year. But as Sonia Legg reports, there are still no guarantees a Grexit can be avoided.

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They still queue every day for their cash ration from closed banks. But the end may be in sight. The ECB has agreed emergency funding after the Greek parliament approved a controversial austerity package. European shares hit a six week high after the vote which needed opposition support after a revolt by members of the ruling Syriza party. Holger Schmieding, Chief Economist at Berenberg Bank, says that's progress. SOUNDBITE: Holger Schmieding, Chief Economist, Berenberg Bank, saying (English): "With Prime Minister Tsipras having a different coalition and with the progress towards a deal we should see the Greek economy starting to normalise at the end of this quarter, say four, five, six weeks after the banks have re-opened." First job now is an emergency loan to enable Greece to pay a key ECB debt payment on Monday. Euro zone finance ministers have been discussing the best way to provide it. Annika Breidthard is European Commission spokeswoman. (SOUNDBITE) (English) EUROPEAN COMMISSION SPOKESPERSON, ANNIKA BREIDTHARD, SAYING: "The parliament, the Greek parliament took an important step yesterday towards rebuilding trust with Greece's international partners." Many Greeks don't see it that way - as violence during the vote showed. But other euro zone parliaments are now expected to approve moves towards achieving a new 86 billion euro bailout. Whether they'll now tackle the thorny issue of a debt haircut isn't clear. Germany still insists that's not an option, because Greece already has favourable terms from creditors. SOUNDBITE: Holger Schmieding, Chief Economist, Berenberg Bank, saying (English): "Europe is ready to extend maturities, to cut interest rates further if needs be, to extend the grace period in which nothing is paid, not even interest on the loans. But an upfront big haircut is neither necessary nor does it make sense. It would in fact reward the loony policies that Syriza has pursued over the last six months." Prime Minister Alexis Tsipras is licking his wounds. He knows the Greek parliament chose the lesser of two evils. He also knows a Grexit hasn't yet been avoided.

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Europe moves to restore Greek funding

Thursday, July 16, 2015 - 01:58