Cause and Effect in European Politics and Law

The EU discusses a bail-out for Greece?

Ralitsa Kovacheva, March 15, 2010

The Finance ministers of the European Union are meeting on Tuesday to asses the implementation of Greece's austerity measures and to decide whether Athens should receive a rescue package from the community. It is expected the deal to be approved by the Euro group on Monday evening. Authorities in Berlin and Athens deny the preparation of a bail-out plan, the BBC reports.

On Saturday the media quoted anonymous senior officials, who said the EU was close to a rescue deal for Greece worth 25 billion euro. According to some European media, the options being considered include the provision of loans to Greece and a bond issue, guaranteed by eurozone countries. The BBC's correspondent in Brussels Gavin Hewitt said, that only eurozone members would take part in the rescue deal -Germany and France being the main backers. A possible funding is considered as being a last resort which might not be needed.

On Tuesday the finance ministers Council will discuss implementation of the Stability and Growth Pact, in light of the Greek problems, as well as the idea of creating a European monetary fund. Generally, the idea meets support, including by the European commission, but it is still to be decided whether euro zone countries will take part only or the whole EU-27. Another important issue to be debated is whether there is a need to change the Lisbon treaty.

The Council will also prepare the spring meeting of the European Council (March 25th and 26th), focusing on Europe 2020 strategy for growth and jobs, financial sector exit strategies and financing climate change measures. It is expected ministers to agree on a general approach regarding a draft directive on hedge funds and other alternative investment fund managers.