Polish Finance Minister Jacek Rostowski speaks to journalists in Wroclaw ahead of Friday's ECOFIN meeting. Photo: PAP/Maciej Kulczyński
The ECOFIN meeting in Wroclaw, south-west Poland, is to concentrate on the eurozone crisis and stability of European banks, and is to be hosted by Poland’s Finance Minister Jacek Rostowski as well as the head of the central bank, Marek Belka.
The issue of Greek bailouts as well as an attempt to stem Italy’s financial woes are also high up on the meeting’s agenda.
Geithner will hold talks on the possibility of leveraging the eurozone’s bailout fund, one day after the US Federal Reserve teamed up with the European Central Bank and the central banks of England, Switzerland, and Japan to boost liquidity as well as offer new dollar loans to commercial banks.
The cash injection is to ease funding pressures as well as take the strain off credit markets and has been well received, with International Monetary Fund chief Christine Lagarde saying the central banks’ move is “exactly what is needed.”
During Friday’s meeting, Timothy Geithner is expected to put pressure on eurozone ministers to act definitively to bolster the euro afloat and to keep it from rocking global markets.
Sources have mooted that Geithner will most probably want the European Financial Stability Fund – which was set up in 2010 as a reaction to the financial crisis – to follow in the footsteps of an emergency loan fund set up in the USA in 2008 to free up credit markets.
However, not all EU finance ministers seems to be convinced of Geithner’s plans. Asked on whether Geithner was in Poland to listen or talk, Belgium’s Finance Minister Didier Reynders quipped “the best solution is to listen.”
Eurozone finance ministers are not likely to keep their voices down, however, as the two-day meeting in Wroclaw will prove whether the EU will decide on a further 8 billion euro aid package for Greece, even though Athens is being sluggish with reforms.
Failure to push through the bailout option would mean definite bankruptcy and a restructuring of Greek debt.
Olli Rehn, the EU’s economic affairs commissioner, has said that he expects auditors from the EU, European Central Bank (ECB) and the International Monetary Fund to report their findings into Greece’s headway with reforms by the end of September. (jb)
Source: PAP/BBC/AFP/Reuters