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Why it's necessary to rescue EU bailout deal

11-02-2011 16:45 BJT

by Xia Wenhui

BEIJING, Nov. 2 (Xinhua) -- Greece's decision Monday to put to a referendum a rescue plan reached at last Thursday's European Union (EU) summit has shocked Europe. Now EU leaders are racing to save the deal, which is vital not only for Greece and Europe, but for the world economy.

The rescue deal was so far the EU's most ambitious and comprehensive bid to pull Greece and Europe out of financial turmoil, but the referendum has put the plan at grave risk of being vetoed.

Other European nations are trying to help, but the target of that help is retreating because of converging pressure from the strict austerity measures forced by eurozone nations and domestic outcry.

The prospects for a referendum yes vote currently appear gloomy. Opinion polls in Greece suggest about 60 percent of the Greek people do not support the deal and there have been continuous demonstrations, some of them violent, against austerity measures so far implemented in Greece.

A failed referendum might lead to the possibility of a Greek default, which otherwise could be avoided, and a worsening crisis engulfing other EU economies, such as Italy and Spain.

German Chancellor Angela Merkel was right when she said that to rescue Greece is to rescue Europe. And it could equally be said that to rescue Europe is to rescue the world economy.

It's unanimously agreed that urgent efforts must be taken to prevent the rescue plan from being aborted.

An urgent EU leaders' meeting has been called to stop Greek leaders from reportedly "gambling" on the referendum, which is viewed by some as a vote on Greek membership of the eurozone.

For this, European leaders can take three key goals to this meeting.

First of all, they should seek to restore confidence for the rescue deal by either persuading Greek leaders to drop the referendum idea -- though that now seems impossible -- or by helping them find a better solution to their political embarrassment, which is now endangering the rescue plan.

Second, the EU should make greater efforts to carry out the bailout deal just reached as an outline which needs further discussion by EU financial ministers and bankers, because the Greek referendum plan is an alarm that may trigger further retreats or setbacks.

And third, though the rescue deal is not a silver bullet for Europe's political and financial difficulties, all EU members are in the same boat and need to pull together, with no exception, if they are to sail clear of this storm.

Editor:Wang Xiaomei |Source: Xinhua

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