ECONOMY

EU chief urges Slovakia to back Greek loans

European Union president Herman Van Rompuy urged Slovakia on Thursday to back the single European currency through aid to Greece, which the 2009 eurozone entrant has been reluctant to provide so far.

“This is not about Greece alone, it’s about safeguarding the euro area financial stability,» Van Rompuy told reporters after meeting Slovak Prime Minister Iveta Radicova.

Slovakia was the only eurozone member to refuse an emergency loan to Greece last year, and its centre-right governing coalition in power since July 2010 has suggested it might refuse to support a new loan as well.

Greece will be able to pay its bills this month after the eurozone cleared the way last Saturday for the next 12-billion-euro tranche of last year’s 110-billion-euro EU-IMF bailout.

But the eurozone’s finance ministers need to work on a second rescue package potentially of similar size to ensure Athens can stay afloat until at least 2014, warding off a devastating default that would reverberate across Europe.

“We are asking other member states who are in a better position to provide guarantees. We are not asking for gifts, we are asking for loans that will be paid with interest,» Van Rompuy said.

“What we are facing now is not a crisis of the euro. The euro is a strong and stable currency,» he added.

Radicova said she was «facing upset citizens and trying to explain to them we have no other choice,» before adding her country was «dealing with problems we hadn’t caused.”

[AFP]