Sarkozy calls on Europe to rescue Greece
Baku, October 1 (AZERTAC). French president Nicolas Sarkozy is to hold urgent talks in Germany with Chancellor Angela Merkel on speeding up the rescue plan for the euro.
Sarkozy said on Friday the talks would take place within days as uncertainty about the eurozone`s stability and worries about deepening recession returned to European markets.
Declaring after talks with Greek premier George Papandreou that "a failure of Greece would be a failure for all of Europe", the French president praised Athens for its determination to meet its commitments and said: "There can be no question of dropping Greece."
His comments came as European leaders turned up the heat on Slovakia to approve the enhanced eurozone rescue fund amid growing fears it could yet scupper the scheme.
Only a day after huge relief at Germany's decision to endorse the expanded bailout fund, anxiety stalked markets and the corridors of power as eurozone inflation rose to a three-year high of 3%, shares in French banks plunged as much as 10% and Denmark's central bank offered 400bn krone (£46bn) in emergency liquidity for the country`s banks.
There was renewed talk of a Greek debt default and larger "haircuts" for private bondholders as Papandreou sought backing for a further €8bn (£6.8bn) lifeline to save his country's treasury from bankruptcy.
Sarkozy said: "There is a moral and economic obligation of solidarity with Greece." Papandreou in turn told reporters that his nation was making all the required sacrifices and reforms. "I wish to make it perfectly clear that Greece, I myself, our government, the Greek people, are determined to make the necessary changes."
Yet conflict sprang up anew over plans to set up an even bigger rescue fund for the eurozone, with leading European bankers demanding an outline agreement on a new scheme by the time G20 finance ministers meet in mid-October.
Austria brought some solace, becoming the 14th eurozone member to endorse enhanced powers for the €440bn European Financial Stability Facility when its parliament voted 117 to 53 to raise their country's contribution to €21.6bn.
After the Bundestag voted overwhelmingly in favour on Thursday, Germany's second chamber, the Bundesrat, followed suit - leaving only Malta (next week), the Netherlands (on 6 October) and Slovakia to vote.
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