Investors Want Bold Steps Taken Against Debt Crisis
DAVID GREENE, Host:
A bit of bond buying from China will hardly solve Europe's financial troubles. Greece remains a major concern. Yesterday, shares in French banks plunged amid investor panic about their holdings of Greek debt. NPR's Eric Westervelt has more.
ERIC WESTERVELT: Several leading French banks - the biggest holders of Greek government bonds - fell more than 10 percent Monday. The drop forced the French Finance Ministry to rush out a statement to try to reassure investors. But investors don't seem convinced. Europe is lurching from one financial crisis to another with no bold leadership spearheading efforts to find a solution, says Jurgen Michels, the euro area economist at Citibank.
JURGEN MICHELS: We probably could be much, much further in dealing with the crisis if we have seen bold measures at an earlier stage. And at the end of the day, we see that it is the markets who creates the pressure and forces additional action from political decision makers.
WESTERVELT: Recent comments by leading German politicians saying that debt-damaged Greece may eventually have to default, and perhaps be suspended from the eurozone, hardly helped calm the markets. And last Friday night's surprise resignation by European Central Bank chief economist Juergen Stark only underscored the growing sense of a lack of leadership and direction in addressing the debt crisis.
Highlighting the potential global dangers of Europe's debt problems, U.S. Treasury Secretary Timothy Geithner announced he'll go to a meeting of eurozone finance ministers in Poland on Friday - the first time a U.S. Treasury secretary has attended such a meeting. Eric Westervelt, NPR News, Berlin.
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