Stocks Lower as Greece Resisting EU Call for Further Budget Cuts
US stocks opened sharply lower Friday as Greece is continuing to dominate headlines. At last check, the Dow is down 103 points, the Nasdaq is down more than 25, and the S&P 500 is down about 11 points.
Following details of the latest austerity proposal announced on Tuesday (a reduction in the minimum wage, lowered pension payments and massive job cuts in the public sector), unrest has broken out in the streets of Athens. The nation's major labor unions reportedly began a 2-day strike early Friday.
While Greece's newest austerity plan takes a much-needed step in the right direction, Greek officials are having a difficult time coming up with the needed requirements for the next EU bailout package, anticipated to be about €130 ($172 billion). The measures would reduce Greece's debt level to 136 percent of GDP by 2020, below the 120 percent sought from the Union.
German Finance Minister Wolfgag Schaeuble voiced concern about the latest scenario of cuts, pointing at the higher-than-required level of debt. As cited in a Bloomberg story, a spokesperson from the German Finance Ministry called the Greek offer "not sufficient" and said officials will need to "go away to come up with a revised plan." Jean-Claude Juncker, head of the Euro Group, has also indicated a need for a revised plan.
But the Greek government is already resisting calls for deeper budget cuts. Greek Finance Minister Evangelos Venizelos urged Greek officials to give in to demands, expressing concern that such refusal would ultimately lead the Greece being forced from the euro area.
Greece's parliament will vote on the austerity package this weekend.
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Following details of the latest austerity proposal announced on Tuesday (a reduction in the minimum wage, lowered pension payments and massive job cuts in the public sector), unrest has broken out in the streets of Athens. The nation's major labor unions reportedly began a 2-day strike early Friday.
While Greece's newest austerity plan takes a much-needed step in the right direction, Greek officials are having a difficult time coming up with the needed requirements for the next EU bailout package, anticipated to be about €130 ($172 billion). The measures would reduce Greece's debt level to 136 percent of GDP by 2020, below the 120 percent sought from the Union.
German Finance Minister Wolfgag Schaeuble voiced concern about the latest scenario of cuts, pointing at the higher-than-required level of debt. As cited in a Bloomberg story, a spokesperson from the German Finance Ministry called the Greek offer "not sufficient" and said officials will need to "go away to come up with a revised plan." Jean-Claude Juncker, head of the Euro Group, has also indicated a need for a revised plan.
But the Greek government is already resisting calls for deeper budget cuts. Greek Finance Minister Evangelos Venizelos urged Greek officials to give in to demands, expressing concern that such refusal would ultimately lead the Greece being forced from the euro area.
Greece's parliament will vote on the austerity package this weekend.
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