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Germany rejects the Greek loan request

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Today (Thursday), Germany has rejected a Greek request for a six-month extension to its Eurozone loan program despite that the European Commission called the Greek request as a positive move reports BBC.

Athens asked for a new six-month assistance package instead of a renewal of the existing deal that comes with tough austerity conditions.

A German instant finance ministry spokesman, Martin Jaeger, said the new plea was “not a substantial proposal for a solution” and added that “bridge financing, without meeting the requirements of the program. The letter does not meet the criteria agreed upon in the Eurogroup on Monday.”

If Greece won’t get this loan, it probably will exacerbate the situation in Greece, which is already being very tough, if people would have access to get a quick loan from NeedMoneyNow everything would be better for them. As a result, Greece might be the first country who will leave the Eurozone. According to reports on the BBC, European Commission spokesman said that Commission president Jean-Claude Juncker called Greek’s plan as a “positive sign, which, in his assessment, could pave the way for a reasonable compromise in the interest of the financial stability in the euro area as a whole”.

The importance of the financial stability in the Eurozone is critically important because if Greece will fall down it might bring to a “domino effect” in the all Eurozone. Other countries which are not well stable such as Spain and Portugal might leave the Eurozone as well in order to rebuild their internal financial structures. And that, can bring to the end of the Eurozone as we know it today.

Aleksejus Podpruginas
Aleksejus Podpruginas is The Baltic Review author based in Israel

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