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Business Daily: Euro-debt - who'll pick up the tab?

20/06/2011

Euro-debt - who'll pick up the tab?

BBC World Service - Business Daily, Euro-debt - who'll pick up the tab?

The key issue in the Eurozone debt crisis - who will ultimately pay?

Eurozone finance ministers made the latest loan to Greece conditional on new austerity measures, but virtually no one thinks Greece will ever pay back all its debts. So who will pick up the tab?

The on-going drama of Greece's debt crisis once again dominates the news, so today Business Daily digs beneath the headlines to ask what is really at stake.

Very few people believe Greece will ever be able to pay back all its debts - so in that sense some kind of default is pretty much inevitable. The big question now is who is going to pick up tab.  

The decision by Eurozone finance ministers to delay the latest loan to Greece until the Greek parliament passes the package of tough austerity measures is really a way of making sure that the Greek people bear some of the costs.  

All the main players - Germany, France and the International Monetary Fund - agree that should happen. What they still can't agree on is how much of a hit the private banks who made the loans to Greece in the first place should take and how much of the burden should be bourne by the tax payers of Europe.  

Justin Rowlatt interviews Dr Andrew Lilico who is Managing Director of the economic consultancy Europe Economics.

And we have a rare interview with a top Chinese civil servant.  Yu Yuantang is in charge of European Affairs at China's Ministry of Commerce - the vast and powerful government department that controls much of the Chinese economy.  

Justin Rowlatt asks him what China thinks about the on-going troubles faced by one of its key trading partners.

Plus, the BBC's Paul Mason tells the curious tale of the unemployed Greek tax collectors.

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