Speculation that European leaders will increase funds available for eurozone bailouts raised stocks Tuesday, despite resistance to the idea from many German politicians. The German parliament is set to hold a crucial vote on Thursday regarding the issue. Mindful of opposition to a beefed-up bailout fund, German Finance Minister Wolfgang Schaeuble denied any plans to directly inject more money into the fund, implying there may be a way to leverage more money into it, like an equity fund. German Chancellor Angela Merkel has been steadfast in her position that Greece will not default on its sovereign debt. She is scheduled to meet with Greek Prime Minister George Papandreou Tuesday night to discuss that country’s latest austerity legislation. Economic advisors to the German and French governments released an open letter recently that urged policymakers to allow Greece to write off 50 per cent of its debt. In order to remain solvent, Greece needs an addition 8 billion euros. But even if they receive the funding, most analysts are predicting a Greek default in the coming months.
Stocks rise as talk of more bailout funds for Greece swirls
Speculation complicates debate in Germany ahead of key vote
FILED UNDER: Euro