Sept. 14 - European Commission President Jose Manuel Barroso brings the idea of euro bonds to the fore, as a possible solution to Greece's debt woes. Kirsty Basset reports
Greeks aren't happy, and neither are their neighbours. As fears grow about a Greek default - and the future of the euro zone, European Commission president Jose Manuel Barroso says policymakers are facing the challenge of a generation. (SOUNDBITE) (English) EUROPEAN COMMISSION PRESIDENT, JOSE MANUEL BARROSO, SAYING: "This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world. This is a fight for European integration itself." He says the only way forward for Europe is deeper integration, possibly through the introduction of euro bonds, which would see euro zone countries collectively issue debt. But euro bonds would not bring an immediate solution to Europe's debt woes - and the idea is deeply unpopular in AAA rated Germany, which stands to lose the most - as it would effectively underwrite weaker member states. Louise Cooper is from BGC Partners. (SOUNDBITE)(English) BGC PARTNERS MARKET ANALYST LOUISE COOPER SAYING: "At the moment, given the political situation in Germany, I think there's a lot of skepticism that that will be acceptable to many Germans, either constitutionally, legally, also from a political perspective." What is clear is that indecision and the absence of a clear solution, is starting to bite. European Commissioner for Economic and Monetary Affairs, Olli Rehn. (SOUNDBITE) (English) EUROPEAN COMMISSIONER FOR ECONOMIC AND MONETARY AFFAIRS, OLLI REHN, SAYING: "What we are now seeing is that the real economic growth and employment are now under an extreme pressure from the negative ramifications stemming from the continued market turbulence as related to the sovereign debt crisis." He also said no one would be better off if debt-laden Greece left the euro zone, adding that a default would have dramatic costs. That's a situation French President Nicolas Sarkozy and German Chancellor Angela Merkel are determined to avoid and are demanding guarantees from Greek Prime Minister George Papandreou that Greece keep its end of the deal, and follow through with debt reducing reforms. Italy is another country causing concern with its almost 2 trillion euro debt mountain. Silvio Berlusconi's government won a confidence vote on an austerity bill proposing a 54 billion euro mix of tax hikes and spending cuts, after a troubled passage through parliament. As with Greece, the focus is now whether the promised reforms will be implemented. Kirsty Basset, Reuters.