Focus of world economy on Greece

The coming hours in Greece are ?crucial? to the stability of the world economy, European Council President Herman Van Rompuy said on Tuesday.

Eurozone leaders and policymakers in Brussels have pinned Greece?s emergency funding on the approval of another austerity package by the Greek Parliament, which votes today on the plan.

Van Rompuy said the vote is crucial to the people of Greece, the eurozone and the whole world.

European Commission President Jose Manuel Barroso, speaking beside Van Rompuy in the European Parliament on Tuesday, said the Greek Parliament must ?redouble its efforts.? ?We need structural reforms for Greece to recover growth,? said Barroso.

The 2012-15 plan introduces 28 billion euros of austerity measures and an ambitious 50-billion-euro privatization plan over the next five years.

European Economic and Monetary Affairs Commissioner Olli Rehn said on Tuesday that Greece will immediately default if its Parliament does not support the government?s economic austerity proposals this week.

?The only way to avoid immediate default is for Parliament to endorse the revised economic program… They must be approved if the next tranche of financial assistance is to be released,? Rehn said in a statement.

?To those who speculate about other options, let me say this clearly: There is no Plan B to avoid default,? he said.

Rehn?s words appeared to be carefully chosen he did not specifically rule out a contingency plan should Greek parliamentarians refuse to come into line, but said there was ?no Plan B to avoid default.?

EU leaders and other senior officials have called in recent days for eurozone and broader EU member states to ensure their banks are well capitalized and are ready to withstand any problems, including potential contagion from Greece.

Rehn said Greece faced a critical juncture this week, with both its future and that of financial stability in Europe at stake.

?The European Union continues to be ready to support Greece. But Europe can only help Greece if Greece helps itself,? he said.

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