EU summit Concludes with Support for Greece in its Debt Crisis

EU summit concludes with political support for Greece

BRUSSELS, Feb. 11, 2012 (Xinhua) --

The first summit of the European Union (EU) called by the bloc's first full-time President Herman Van Rompuy concluded here on Thursday afternoon, showing clear political support for debt-laden Greece.

At a press conference after the summit, Van Rompuy said that "a consensus emerged" among the member states on the Greek fiscal crisis to show solidarity of the EU.

Jose Barroso, head of the European Commission, said at the press conference that the Greek crisis would be dealt with in a dual approach, which means the EU member states show its solidarity by taking "determined and coordinated action if needed" and Greek bears its responsibility to carry out the stability program it submitted in mid-January to reduce its budget deficit.

According to an invitation letter from Van Rompuy, the summit was supposed to focus on drawing an economic blueprint for the 27- member bloc for the next ten years. However, the crisis concerning Greece's budget deficit overshadowed the discussion on the long- term economic blueprint for 2020.

At the press conference, Van Rompuy said he called the informal summit to discuss the EU 2020 strategy, but "events have decided otherwise," implying Greece's fiscal crisis has dominated the summit instead.

But Van Rompuy said the first summit convened by him was " successful" and "productive," adding that the European Council is "very ambitious to take the lead" in forming the long-term strategy in future talks.

Greek Fiscal Crisis Dominates EU Summit

BRUSSELS, Feb. 11, 2010 (Xinhua) --

The first summit of the European Union (EU) called by the bloc's President Herman Van Rompuy ended here on Thursday, dominated by Greece's fiscal crisis instead of an economic blueprint as originally planned.

At a press conference held after the summit, Van Rompuy said that the discussion of EU 2020 Strategy has been put to the background, while much of the time was devoted to Greece's fiscal crisis.

With rising unemployment, an aging population and soaring budget deficits, the EU informal summit was originally planned to draw an economic blueprint to replace the current Lisbon Strategy which is due to expire in 2010.

But as Van Rompuy said that "events have decided otherwise," the EU 2020 Strategy was not fully discussed at the summit.

"It would be foolish to neglect a long term strategy, but it would be even more foolish and irresponsible to neglect the short term," he said.

Van Rompuy read a statement concerning Greece earlier during the summit, pledging "fully support" for the efforts of the Greek government and the commitments it made to reduce its budget deficit.

The Greek government submitted to the European Commission its stability program on January 15, pledging to keep its budget deficit below 3 percent of its Gross Domestic Product (GDP) in 2012.

Van Rompuy said in the statement that euro area member states will "take determined and coordinated action, if needed, to safeguard financial stability in the euro area as a whole."

Despite speculation that a rescue plan would be announced for Greece, the statement did not promise any financial aid to the country, saying "the Greek government has not requested any financial support."

Jose Barroso, head of the European Union, stressed at the press conference that the Greek crisis would be dealt with in a dual approach, which means the EU member states show its solidarity by taking "determined and coordinated action" and Greek bears its responsibility to carry out the stability program it submitted in mid-January.

As to questions that the pledge of political support may not be enough to allay fears of investors, Barroso told reporters that it was still too early to judge the effects of "the clear political will" showed by the EU leaders.

As far as the informal summit was concerned, Barroso said that political support was "proper" and more formal decision should be taken later by proper institutions.

He pointed out that EU finance ministers will meet on February 16 for a monthly meeting, which is expected to discuss Greece's crisis.

Editor: yan

EU summit overshadowed by Greece's fiscal woes

BRUSSELS, Feb. 11, 2010 (Xinhua) --

An informal summit of European Union leaders on Thursday, originally called to work on a new economic strategy for the next decade, has been overshadowed by Greece's financial woes.

The gathering was the first EU summit chaired by European Council President Herman Van Rompuy, who had hoped the meeting would focus on an economic blueprint for the 27-nation bloc by 2020.

But Greece's money problems, a very recent addition to the summit agenda, proved to be the most closely watched issue and stole the show from talks concerning long-term economic strategy.

Expectations ran high ahead of the summit that EU leaders would lay the groundwork for a rescue of debt-laden Greece in order to prevent a spillover in the euro zone, a monetary union with 16 EU member states.

There had been increasing concern that Athens would not be able to handle its financial problems and as a result, threaten the stability of the entire euro zone. The concern put European stock markets under distress and pulled down the euro.

Greece's public deficit was estimated at 12.7 percent of its gross domestic product (GDP) in 2009, far above the accepted EU limit of 3 percent.

The Greek government submitted to the European Commission its stability program in January, pledging to reduce its budget deficit to 2.8 percent in 2012.

Despite the commission's endorsement of the plan, investors are yet to be convinced and the crisis was tending to spread along the periphery of the euro zone, with Spain and Portugal seen as the next weak links.

A European Council official said the EU summit had been delayed by around two hours to accommodate bilateral talks on support for Greece.

Greek Prime Minister George Papandreou met French President Nicolas Sarkozy, German Chancellor Angela Merkel and EU President Van Rompuy ahead of the summit.

Germany reportedly is leading efforts within the EU to help Greece, but it remained unclear what kind of help would come out of the summit.

Finance ministers from the euro zone held emergency talks Wednesday to search for a way to help Greece tackle its debt crisis. Sources said there would be a general statement from several countries to pledge support.

An EU official said on Wednesday that EU leaders would issue a statement concerning the Greek crisis, but he refused to disclose whether there would be any bailout plan for the country.

Austrian Chancellor Werner Faymann said the EU was to offer Greece a credit line with the help of the International Monetary Fund (IMF) to make sure that the country does not default on its debts.

Britain and Sweden, both of which are outside the euro zone and reluctant to pay for the bailout of Greece, preferred to seek help from the IMF.

However, some EU officials, including Luxembourg Prime Minister and Jean-Claude Juncker, president of the Eurogroup, have made clear the EU's problem had to be dealt with by itself.

Both the European Central Bank and the European Investment Bank, backed by EU governments, had said their statutes prohibited them from rescuing a member from deficit crisis.

EU rules also prevented the 27-nation bloc from bailing out a member. The most likely option was for some EU countries to help Greece in bilateral manner, either through loans or debt guarantees.

It was reported France and Germany, the two European economic heavyweights, were ready to show strong political support for Greece and wanted to get the entire EU on board, but the two would fall short of making promises of concrete aid measures.

No matter what kind of support, it may lead to the problem of moral hazard. The current crisis has been blamed on years of overspending by the Greek government, but the problem became the job of other EU countries to get rid of the mess.

EU leaders are likely to demand clear commitment from Athens to meet its responsibility in exchange for any support, analysts say.

Editor: Han Jingjing

Barroso: Accord reached on Greece's budget deficit crisis

BRUSSELS, Feb. 11, 2010 (Xinhua) --

An accord concerning Greece's budget crisis has been reached, the president of the European Commission said Thursday.

"There is an accord, the presidency will announce it," Jose Barroso, president of the European Commission, told reporters several minutes before an informal summit of the European Union (EU).

The summit had been scheduled to start Thursday morning but was delayed because of heavy snow in Brussels.

It was also reported that the delay was due to a meeting involving several leaders, Barroso and Herman Van Rompuy, president of the European Council.

An European Council official said earlier that some heads of state and government have held bilateral talks on the Greek crisis.

Editor: Xiong Tong

Eurozone finance ministers hold emergency talks on Greece

BRUSSELS, Feb. 10, 2010, (Xinhua) --

Finance ministers from the euro zone were holding emergency phone talks on Wednesday, raising hopes that the European Union (EU) may step in to contain the fallout from Greece's fiscal woes.

According to the French Le Monde daily, Luxembourg Prime Minister Jean-Claude Juncker, who heads the eurogroup of 16 finance ministers from the countries using the common currency, was to join in the talks.

Eurozone finance ministers had scheduled a regular monthly meeting in Brussels on Monday, but the recent turbulence on the European financial markets caused by Greece's debt crisis made an earlier discussion necessary.

It was feared that a government debt crisis was spreading from Greece to other countries on the periphery of the euro zone, such as Spain and Portugal, posing a threat to the overall stability of the whole monetary union.

Greece has presented a plan to lower its budgetary deficits to within EU limits by 2012. The measure last week was endorsed by the European Commission but markets remain nervous about Greece's ability to implement the plan.

Wednesday's emergency phone talks came one day before EU leaders were to meet in Brussels with Greece's fiscal woes expected to be one of the main agenda topics.

Speculation ran high that the EU may have to bail out Greece in order to prevent the turbulence from becoming worse.

An EU source said the leaders may come out with a statement on Greece's government debt crisis.

It was reported that Germany, the EU's economic heavyweight, was considering a plan to lead support for Greece.

Under EU rules, the euro zone as a whole can't bail out individual members, but national governments can help each other on a bilateral basis.

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