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Brussels summit to focus on Greek debt

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Brussels summit to focus on Greek debt

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Greece’s Herculean debt is coming up for discussion at a special economic summit in Brussels this Thursday. Following talks with the Greek Prime Minister in Paris, French President Nicolas Sarkozy did not comment on an aid package under consideration from the other euro countries to Athens.

George Papandreou said Athens would honour recent commitments: “We are ready to take any measure in order to make sure that the goal of cutting our deficit by 4% in 2010 to the percentage of 8.7% of our GDP will be [achieved]. We are ready to take any measures in order to make this sure.”

Analysts say even if European governments launch the first rescue of a euro zone member in their currency’s 11-year history, it may not be enough to
prevent investor concerns from spreading.

ING analyst Julien Manceaux said: “The worst would be to call in the International Monetary Fund. We know the measures that would come with that intervention would be very hard on Greece, and it would take time to get back on its feet, and it would look bad for the whole euro zone. So, the best way to get out of this for the moment is probably stepping in together, keeping Greece company to get it out of its deficit.”

With Greece suffering a 36-to-50 billion euro shortfall in liquidity, its fellow euro members will take careful aim to avoid the feared spillover effects in the rest of the euro zone.