NEWS

EU leaders encourage Greece

Top-ranking European Union officials Monday expressed support for Greece following a weekend of feverish speculation about the outlook for debt-ridden Greece and the stability of the eurozone following the interruption of talks between the Greek government and its international creditors late last week.

Meanwhile Greek officials attending the Eurogroup Working Group in Brussels were Monday night expected to press for a renegotiation of the goals of a multi-billion-euro bailout scheme for Greece, arguing that a deeper-than-expected recession has necessitated a review of budget deficit reduction figures.

According to sources, EU President Herman Van Rompuy reassured Prime Minister George Papandreou of his support for the Greek government?s efforts during a telephone conversation but stressed that the implementation of structural reforms and fiscal adjustment must be accelerated. Also Monday, in comments to the Belgian state radio, Van Rompuy sought to quash speculation about Greece leaving the eurozone. ?This would create more problems than solutions,? he said. Later in the day, Van Rompuy said a solution would soon be found to a problem that has threatened to scupper a fragile consensus on Greece?s second bailout — Finland?s insistence on guarantees from Greece in the form of collateral. ?Good progress is being made, and I am confident we will find a solution soon,? Van Rompuy said in a joint press conference with Finnish Prime Minister Jyrki Katainen. Van Rompuy added that the rescue package included a provision for collateral that had to be respected.

In Berlin, German Chancellor Angela Merkel also ruled out the scenario of Greece — or any other EU country with debt problems — leaving the eurozone, noting that this would provoke a dangerous ?domino effect.?

Words of encouragement for Greece also came from Christine Lagarde, the head of the International Monetary Fund — one of Greece?s three foreign creditors. In an interview with German news magazine Der Spiegel, Lagarde said the IMF was ?determined? to help Greece overcome its debt problems ?and gain competitiveness.? Overall, support for Greece has been in short supply in the German press which has been dominated with headlines such as ?Patience for Athens is running out.?