22 Jun 2011

World shares rise on Greek vote

6:16 pm on 22 June 2011

Global shares have risen after Greece's government survived a critical confidence vote on Wednesday.

Prime Minister George Papandreou's new cabinet was approved by more than 150 MPs in the 300-seat parliament, avoiding for the time being the country defaulting on its debts.

The new cabinet will now be asked to approve billions of dollars worth of cuts, tax rises, fiscal reforms and privatisation plans next week.

Eurozone ministers say the legislation must be passed to receive a €12 billion loan Greece needs to pay its debts.

Flow-on effects for NZ

A senior banker says Europe's debt problems are adding to the cost of borrowing for banks in New Zealand.

The ongoing problems in Greece have caused the country's biggest bank, ANZ, to defer raising money from investors. It says it will wait for the turmoil on European markets to die down before going back to the markets.

The BNZ's treasurer, Tim Maine, says the ANZ was right to pull the bond issue. He says the debt problems in Europe are forcing banks to pay investors more to raise funds.

Mr Maine says that's despite the Australasian banks having some of the best ratings in the world.