European Union

We are making superhuman effort, says Greek PM Papandreou

Reuters/Tobias Schwarz

World stocks continued to rally for a second day running on Tuesday with huge advances in Europe amid confidence that the European Union and world leaders are preparing a blockbuster response to the eurozone debt crisis. 

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The euro also rose against the dollar as Greek Prime Minister George Papandreou insisted Greeks were making a "superhuman" effort to keep on top of the crisis and German Chancellor Angela Merkel said cutting debt was the only way forward.

The Greek prime minister is in Germany for talks with German Chancellor Angela Merkel to discuss his country's progress in cutting its budget deficit.

The German parliament is to hold a crunch vote on Thursday on whether to expand the eurozone rescue fund, the EFSF.

The bill is expected to be passed, but it is being seen as a key political test for Merkel with some members of her governing centre-right coalition threatening to defect.

Meanwhile, Merkel has hit back at those urging Europe to introduce new economic stimulus packages to boost demand and spend its way out of the crisis.

"We need to combine economic growth with solid public finances ... we are not in favour of new stimulus programmes," the chancellor told business leaders in Berlin.

"The idea that you need to boost growth by taking on ever greater debt is the wrong idea. I am deeply convinced of that."

Meanwhile, German Finance Minister Wolfgang Schaeuble has hit out at comments made by US President Barack Obama that Europe was “going through a financial crisis that is scaring the world”.

“Europe's current debt problems are not causing the United States' economic woes, even if US President Barack Obama thinks so,” he said in a speech on Tuesday.

“It's always much easier to give advice to others than to decide for yourself,” he said. “I am well prepared to give advice to US government. US is a huge continent, totally different."
 

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