EU faces Greek tragedy if rescue deal not agreed swiftly

ECONOMIC leaders have warned the rest of Europe will face its own Greek tragedy if the eurozone/IMF rescue package for the debt-stricken country is not agreed swiftly.

German economy minister Rainer Bruederle last night confirmed the sum required to save the Greek economy will be €120 billion over the next three years, triple the sum agreed last month by EU leaders.

This is considerably more than the €45bn rescue package being negotiated at present, €30bn of which is expected to come from eurozone members.

Under the new plan Germany said it faces an increase in its contribution from €8.4bn to €25bn.

Ireland’s share is also likely to increase from €450m to €1.35bn.

Reacting last night, the Department of Finance said that if proposals are made at EU level, the Government will consider them in consultation with European colleagues.

Earlier in the Dáil, Fine Gael leader Enda Kenny warned that Greek exposure to the Irish banks could be in the order of €7bn, leaving the state even more exposed than expected.

Fears that Greece’s debt problems are spreading to other parts of Europe led to Spain’s credit rating being downgraded. This move came after Greek bonds were downgraded to junk status, with Portugal’s falling to A- on Wednesday.

IMF chief Dominique Strauss-Kahn, speaking in Berlin, suggested the IMF was confident they could remedy the Greek situation.