Pressure grows on Germany to back Greek bailout

German politicians came under pressure today to cast aside their doubts over a bailout for Greece, with markets increasingly alarmed that Athens may default on its debt and trigger a meltdown elsewhere in Europe.





The heads of the European Central Bank and International Monetary Fund were both due to brief German politicians about the growing crisis that is pounding global stocks and driving up borrowing costs for several euro zone countries.



European Commission officials dismissed any talk of a restructuring of Greece's debt mountain, which totalled 115 per cent of gross domestic product last year and is projected to push even higher as Athens struggles to tame its huge deficit.



However, the spread between Greek and German bonds hit record highs today and the cost of insuring Greek debt rose above Venezuela's, according to CMA Datavision, suggesting the market believes Greece is more likely than not to default.



Greece has asked for as much as 45 billion euros ($59.94 billion) in emergency loans from its euro zone partners and the IMF. Investors, fearing the Germans in particular are dragging their feet, are urging swift implementation of a bailout.



"The chances of a default by the Greek government are increasing not by the day but by the hour. If the IMF and European governments don't come up with something quickly, then I see the market going down further quite rapidly," said Koen De Leus, economist at KBC Securities.



The euro hit a one-year low against the dollar while European stocks fell to a seven-week low.



Rating agency Standard and Poor's slashed Greek debt to junk status yesterday and also downgraded Portugal, raising concerns the crisis may engulf other heavily indebted EU states.



European Central Bank Executive Board member Juergen Stark said EU governments must move rapidly to put their finances in order, adding that current fiscal policies were not sustainable.



"The onus is now on governments to ensure that the crisis that initially affected the financial sector, and subsequently the real economy, does not lead to a full-blown sovereign debt crisis," Stark said.



"Averting it will require very ambitious and credible fiscal consolidation efforts. In fact, substantially stronger consolidation efforts than those conceived so far."



Glaxo, headquartered in Brentford, west London, stressed that sales remained positive even without swine flu, up 4 per cent on an underlying basis.

The group added it was continuing to reduce reliance on "white pills/western markets" to help reduce volatility seen with some of its treatments.

Sales from these developed markets rose 27 per cent in the first quarter, down from 32 per cent a year earlier.

The impact of generic rivals was clear, with first quarter sales of its antiviral Valtrex slumping by 46 per cent in the quarter after competition came on stream in November 2009 following a patent expiry.

Valtrex is expected to suffer further declines as more rivals enter the fray.

Glaxo also faces headwinds from government spending cuts, especially in the US as it drives through healthcare reforms.

Andrew Witty, chief executive of Glaxo, said the US healthcare changes would result in discounts for medicines related to government programmes.

But he said this had been absorbed in the first quarter and would continue to be offset through "improved operational performance".

"The transformation we have already instigated within our US business has been focused on ensuring we are fit to compete in the environment caused by the reform," he added.

Glaxo was given a welcome fillip last year from demand for swine flu treatment, coming at a tough time for established drug companies.

It helped Glaxo return to annual sales growth last year for the first time since 2007, with underlying pre-tax profits up 12 per cent to £8.7 billion in 2009.

Today's better than expected figures saw the group buck wider falls in the market with shares up more than 1 per cent.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Parts Advisor

£16500 - £18500 per annum: Recruitment Genius: One of the leading Mercedes-Ben...

Recruitment Genius: Software Developer

£27500 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Telemarketers / Sales - Home Based - OTE £23,500

£19500 - £23500 per annum: Recruitment Genius: Experienced B2B Telemarketer wa...

Recruitment Genius: Showroom Assistant

Negotiable: Recruitment Genius: This global company are looking for two Showro...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor