Euro Pares Losses as Eurogroup Raises Greek Bailout Hopes
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The Euro pared losses after Eurozone finance ministers, at the conclusion of their conference call on Wednesday evening, raised hopes that the second bailout package for Greece would be approved as early as next week.
In a statement following the call, Luxembourg Prime Minister and Eurogroup Chairman Jean-Claude Juncker cited “substantial” progress in addressing the obstacles that had been hindering approval of the bailout package. Namely, Greece has identified 325 million Euros in additional budget cuts demanded by the Troika, and the leaders of the country’s two main political parties – PASOK and New Democracy – have provided “strong” written commitments to uphold the austerity measures following elections in April. As a result, Juncker expressed confidence that "the Eurogroup will be able to take all necessary decisions on Monday (Feb. 20).”
Markets welcomed the news, with the common currency jumping from 1.3057 to as high as 1.3098 versus its US counterpart within minutes of the statement. The rebound comes as the Euro seems headed for its fourth consecutive session of losses versus the Dollar, with doubts about the approval of the second bailout dominating headlines throughout the week so far. The Euro can be expected to continue to be driven by statements from Eurozone officials heading into Monday.
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