EU pact fuels Greek hope for milder terms

Speaking at the end of a two-day summit in Brussels, where European leaders reached a landmark decision to boost growth and prop up banks, President Karolos Papoulias said growth-oriented measures were crucial to create jobs and extract Greece from a deepening crisis and repeated calls by Prime Minister Antonis Samaras for changes for the country?s debt deal with international creditors.

Papoulias, who went to the summit instead of Samaras as the premier is recovering from eye surgery, told reporters that the European agreement to boost growth was ?particularly important? for Greece, where a deepening recession has pushed up unemployment, especially among young people. This necessitates ?the adoption of all the necessary adjustments to Greece?s economic program with a view to making it more economically effective and socially just,? Papoulias said, adding that ?no unilateral action? should be taken by the Greek side. His words echoed a letter from Samaras to EU leaders in which the premier vows to honor commitments to creditors but seeks modifications in view of the deeper-than-expected recession.

Papoulias said he met with several EU leaders including German Chancellor Angela Merkel, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy, noting that talks with the latter were ?very constructive.? He added that he pushed for a European guarantee on bank deposits. As for the decision to allow rescue funding to be used in future for the recapitalization of banks, the president said it was positive as this aid would be dissociated from state debt.

Socialist PASOK leader Evangelos Venizelos, who was also in Brussels for the European Socialist Party?s summit, also hailed the decision on recapitalization, adding that the broader European consensus boded well for Greece?s intention to renegotiate aspects of its debt deal. ?There is an opportunity, there is crucial momentum in the EU and eurozone,? he said, adding, ?We can draw benefits from this confluence of circumstances.?

Venizelos?s comments came ahead of the expected return to Athens early next week of officials representing Greece?s creditors, the European Commission, European Central Bank and International Monetary Fund. A spokesman for the IMF, Gerry Rice, indicated yesterday that inspectors would not shift on deficit reduction targets but were prepared to discuss how these targets will be met.

Meanwhile, in comments broadcast on the Athens News Agency?s web TV channel, Eurogroup Chairman Jean-Claude Juncker said Greece must continue to implement budget austerity but that there should be a limit. ?We do not aim to cause a humanitarian crisis,? he said.

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