EU leaders meet over Greece debt crisis
Updated on 11 February 2010
European Union leaders are meeting in Brussels to hammer out a financial rescue package for debt-stricken Greece after stark economic measures triggered national protests.
Germany and France are expected to take the lead in sending a message that the EU will help Greece tackle its debt and deficit problems.
But the structure, size and any conditions attached to a deal are unclear.
The progress made by the 27 leaders, their economic advisers, the central bank chief and other senior EU officials will be watched intensely by financial markets around Europe.
Spanish Prime Minister Jose Luis Zapatero has told reporters: "We have to help Greece, and Europe will do it as well as the Eurogroup."
Greece faces the threat of a debt default which would have profound repercussions for the euro single currency used by 16 EU countries. It would also put new market pressure on countries like Spain, Portugal and Italy.
Economics correspondent Faisal Islam, who is en route to the meeting, believes a deal may already have been mapped out by the French and Germans.
He blogged: "You can be sure, though, that something is being concocted, they may be going all out to avoid it being termed a bailout.
"The end result may be some sort of rescheduling of Greece’s debt repayments, through a bilateral guarantee of portions of Greek debt."
The Greek debt crisis is not officially on the agenda for the one-day summit, but it will be discussed by leaders over lunch with the president of the European Central Bank, Jean-Claude Trichet.
Sources say a joint statement from the group leaders is likely to be issued this afternoon.
It is expected it will make a strong political statement of support for Greece, but is unlikely to lay out any specific measures at this stage.
The summit was due to start at 0930 GMT, but heavy snow has delayed the start time.
Angry workers in Athens and around Greece have staged large-scale protests at the austerity measures brought in by the Greek government. Ordinary people face higher taxes and pay cuts.
Business reporter John Sparks writes from Athens -
The public sector unions put up an impressive show of force yesterday.
But it was an opening gambit. Whether the Greek population support the unions is very much open to question.
In fact, recent polls show that around 60 per cent of the Greek people back Greek prime minister George Papandreou’s new austerity plan.
However, the point is that the reforms - which include slashing of public sector pay up by up to 345 euros a month, early retirement, raising of the retirement age by two years, and slew of new taxes - have just been introduced in parliament and haven't taken effect yet.
It seems that people generally accept the necessity of the budgetary slash and burn. But they haven’t felt its full effect.
The unions and private sector workers, who were due to go out on strike on 24 February, are hoping that the public will come onside with a series of additional strikes and sit-ins as the year progresses.
It’s this sort of mass mobilisation that really frightens both the Greek government, the European union, and international investors.
