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Papakonstantinou in Davos: We cannot afford to sell at such a low price

01 February 2010 / 10:02:50  GRReporter
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World economy is recovering - but it is still fragile. This was the most decisive conclusion of this year's Economic Forum in Davos, marred by disputes over the future of financial regulation. Asia leads the recovery with an expected double-digit growth in 2010, while Europe and the U.S. are still struggling with unemployment and large deficits. 

Headline, subject of much discussion was the plan of President Obama to restrict trading by banks on their own account. The idea of the U.S. government is that no bank that holds citizen deposits should trade on the stock exchange on its own. Barney Frank, head of the Committee on Financial Services of the U.S. Congress explain for journalists: "There will be stricter regulations, and banks know it. What became clear on the G20 summit few months ago is that there is desire for coordinated global effort." 

Greek economy was discussed on Saturday - the last day of the forum. European Commissioner for Economic and Financial Affairs Joaquin Almunia said: "Solidarity is possible and exists. Financial assistance is impossible, and there will be none.” Greece has already sold securities with a 5-year period worth €8 billion, but it did it so for too low cost in order to have an interest. Finance Minister Giorgos Papakonstantinou said the country cannot afford to sell more for such low cost. "We have planned to sell securities worth €54 billion, but we cannot afford to sell them on a low price. We will wait for better market conditions before offering a second phase - probably by mid-February.” 

    The strict words of politicians during the forum did not reflect the world markets very well. Dow Jones closed with a loss of 1.7 percent to 10,067 points. Nasdaq recorded largest loss - by 3.26 percent to 2147 points and S&P 500 closed at 1073 points with a decline of 2.6 percent. In London, FTSE closed with a decline of 1.7 percent to 5188.5 points.

Tags: Davos World Economic Forum Papakonstantinou Greece Economy
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