Greek crisis set to dominate EU talks

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Greek crisis set to dominate EU talks

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The debt-laden Greek economy is set to dominate talks between EU leaders in Brussels later on Thursday.

Greece is struggling to pay back debts of some 300 billion euros, or 12.7 percent of its GDP.

European Commission President Jose Manuel Barroso told lawmakers in the European Parliament that the EU should consider its own equivalent to the IMF to help states in financial difficulties.

He said the commission, the EU’s executive arm that drafts many of its laws, “believes it is now appropriate to create within the euro area, an instrument for coordinated action which could be used to provide assistance in case of need.”

Barroso added any solution “should reinforce and strengthen the unity and coherence of the eurozone and its governance.”

Many are looking to the bloc’s richest economy, Germany, to come to the rescue.

But faced with public opposition to a bailout and regional elections due shortly, Chancellor Angela Merkel said Berlin would show solidarity with Greece but not at any price.

Meanwhile, the euro is at its lowest level against the dollar in ten months over fears of a Greek default on its debts.

The crisis has eroded market confidence in the eurozone, which could eventually making borrowing more expensive for other countries and potentially topple other weak economies in the single currency area.