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EU Meeting Spurs Optimism On Greece Debt

MELISSA BLOCK, host:

There were messages of support for Greece today from the leaders of the European Union meeting in Brussels. Greece is one of 16 countries that use the euro and a huge debt burden facing the Greeks has been shaking confidence in the currency. But no specific plans to support Athens came out of todays summit and the financial markets seemed unimpressed.

NPRs Rob Gifford sent this report from Brussels.

ROB GIFFORD: This is the crisis that the EU has managed to avoid for many years. When the idea of the euro was first floated, many warned that it would end up being the stronger economies, such as Germany and France, that would find themselves supporting the weaker economies of Southern Europe like Greece and Portugal.

Now, it looks as though thats happening. As an accurate picture of Greek finances has emerged and the rosy economic figures Athens has been publishing in recent years have been shown to be as mythical as the gods on Mount Olympus. Today the president of the European Council Herman Van Rompuy made it clear the Greek economy would not be allowed to fail.

Mr. HERMAN VAN ROMPUY (President, European Council): Your area member states will take determined and coordinated action, if needed, to safeguard financial stability in your area as a whole.

GIFFORD: Van Rompuy gave no details. Those will be thrashed out next week. The main question was one of confidence. On the one hand, to make clear the Greek economy would not be allowed to go the wall, on the other hand to show there would be no blank check for Athens. As the women who would likely to have to write it, German Chancellor Angela Merkel made clear.

Chancellor ANGELA MERKEL (Germany): (Through translator) Greece is a part of the European Union. So Greece will not be left on its own. But there are rules and Greece must stick to the rules.

GIFFORD: Merkel said the EU had sent a very clear political signal, a phrase also used by French President Nicolas Sarkozy who similarly gave no details of any so-called deal. Sarkozy did try to help the Greeks retain some dignity, though, that they havent just arrived in Brussels with the begging bowl.

President NICOLAS SARKOZY (France): (Through translator) Greece has not requested any financial support. That is important. We have committed to a show of solidarity, transparency and discipline on the part of Greece and support and solidarity on the part of Europe.

GIFFORD: Financial markets seemed unimpressed today and the problems are by no means over. Portugal and Spain also have huge deficits and theres little confidence in the markets that they can reduce them quickly and efficiently. And theres a bigger issue too.

Skeptics of the whole Euro currency project had appeared to have been proved wrong by the relative stability of the Euro since it was introduced a decade ago. Many in Europe had simply given up that criticism. But in Britain where the debate still rages about whether to join the Euro or not, critics like the conservative member of the European Parliament Daniel Hannan used the EUs support for Greece as a platform for attack.

Mr. DANIEL HANNAN (Member, European Parliament): If I were a German tax payer, I would be feeling pretty sore about it. What they are not discovering is this the Euro means that they are required to come to the rescue of governments that have been more profited than their own. By the way, if I were a Greek I would be even angrier because I've been deprived of the one thing that the country ought to do in this situation, which is a short term devolution so as to price themselves back into the market.

GIFFORD: Supporters of the Euro say the last few days have shown European unity in action and that the stronger countries helping the weaker was part of the plan. Critics, however, say they have been proved right that you cant have a unified currency across national borders unless theres a unified approach to taxation and spending. For today, though Greece has the EU support - the question now is how much will that be put to the test in the coming days?

Rob Gifford, NPR News, Brussels. Transcript provided by NPR, Copyright NPR.

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