Hopes for ‘Greek miracle’ as Merkel changes position

HOPES OF a “Greek miracle” calmed investor nerves yesterday, and lifted the Irish index in line with its Continental counterparts.

Markets opened down, but they steadied after German chancellor Angela Merkel retreated from demands that bondholders should shoulder a substantial part of the cost of a Greek rescue.

Expectations of a “Greek miracle” grew after the chancellor’s meeting with French president Nicolas Sarkozy, and sparked a rally across European markets, a Dublin broker said.

Dr Merkel confirmed she would work with the ECB to resolve the Mediterranean nation’s sovereign-debt crisis. “We would like to have a participation of private creditors on a voluntary basis,” Dr Merkel told reporters in Berlin yesterday. “This should be worked out jointly with the ECB. There shouldn’t be any dispute with the ECB on this.”

Mr Sarkozy said a “breakthrough” had been made on the Greek debt crisis, following his meeting with Dr Merkel.

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