Overcast78° WeatherOvercast78° Weather

Greek tax lends hope to euro, Dow

German Chancellor Angela Merkel, right, and Greek Prime Minister George Papandreou addressed the media before their private dinner in Berlin on Tuesday but did not announce any new measures to help Europe’s financial crisis.

Associated Press

German Chancellor Angela Merkel, right, and Greek Prime Minister George Papandreou addressed the media before their private dinner in Berlin on Tuesday but did not announce any new measures to help Europe’s financial crisis.

BERLIN — Stock markets soared around the world Tuesday amid hopes that Europe is finally finding a way out of its debt crisis. Greece passed an unpopular property tax, and German Chancellor Angela Merkel pledged to offer the struggling country "all necessary assistance."

After jumping 2.5 percent Monday, the Dow Jones Industrial Average added 1.33 percent Tuesday, gaining 146.83 points, to 11,190.69. Earlier in the day, the Dow had been up as much as 325 points.

The Euro Stoxx 50 index, a barometer of eurozone blue chips, closed up 5.3 percent.

Financial markets closely watched a meeting between Merkel and Greek Prime Minister George Papandreou, but neither announced any new measures ahead of their private dinner at Berlin's chancellery on Tuesday evening.

"Through the euro, we are closely bound together, and the weakness of one affects us all," Merkel said at a news conference.

Germany, Europe's biggest economy, is seen as a key player in resolving the 17-nation eurozone's debt crisis, but Merkel's government has been accused of being a reluctant leader of the rescue efforts. Speaking earlier Tuesday alongside her economy minister, Philip Roesler, Merkel reiterated her conviction that there is no quick solution, saying the crisis must be dealt with "step by step."

Greece must receive an $11 billion rescue loan before mid October to stave off bankruptcy, a collapse that would send shock waves through markets. But creditors have demanded more efforts to raise revenue.

In response, Greek lawmakers approved a controversial new property tax Tuesday evening. The levy, in addition to public-sector reforms announced earlier, is expected to make up for lagging revenues this year by providing more than $2.76 billion, or about 1 percent of Greece's annual gross domestic product.

Greek Finance Minister Evangelos Venizelos said his country will get the money for the bailout.

Greeks have been outraged by tax and other austerity measures, and unions have responded with strikes and protests. Even as Venizelos spoke, protesting ministry employees and tax office workers chanted outside his department in Athens.

Information from the New York Times was used in this report.

Greek tax lends hope to euro, Dow 09/27/11 [Last modified: Wednesday, September 28, 2011 12:28am]

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...