Thursday, December 10, 2009

EU Classes Greek Debt Situation as 'Very Serious'

Posted by Andrew Lipsitz

BRUSSELS — The financial crisis engulfing Greece is "very serious," requires "support" from fellow EU member states and will be discussed by leaders at a summit dinner in Brussels later Thursday, the bloc's Swedish presidency said.

"It is not formally on the agenda, but I guess prime ministers will relate to the matter informally, because the situation in Greece is very serious," said Swedish European Affairs Minister Cecilia Malmstroem.

"We are of course concerned... It's a difficult situation that needs time, political courage (and) some reform.

"We are in a family, we try to support each other," she underlined.

Greek Prime Minister George Papandreou on Thursday called an all-party crisis meeting aiming to reassure panicked markets that Athens is ready to "clean up" its economy.

Greek debt stands at 300 billion euros, the highest in the country's history, the finance ministry in Athens announced Thursday.

Greece's sovereign debt was downgraded this week by the international ratings agency Fitch, prompting fears around Europe of dangerous spillover effects for the 16 countries that use its euro currency, and the European Union at large.

"They know what they need to do, but they are in difficulty and it will take time," Malmstroem added.

However, Finnish foreign minister Matti Vanhanen said the EU wanted reassurance that no "surprises" lurk behind Greece's latest statements.

"There are big deficits in all countries," he said. "The most important issue is that we have real information, and not surprises."

In Bonn, meanwhile German Chancellor Angela Merkel said that the European Union shared a "common responsibility" for Greece.

"What happens in a member country influences all the others, particularly when you have a common currency," Merkel said after a meeting of the centre-right European People's Party (EPP) in the western German city of Bonn.

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