The Greek government needs to sell €53 billion of debt this year. Figures from the Bank for International Settlements - - sometimes referred to as the central bank for the world’s central banks - - show that European exposure to Greece is concentrated in French and Swiss banks, each with almost $79 billion (€58 billion). The Wall Street Journal said on Wednesday, that German banks are major lenders in Greece, for example, collectively carrying about $43bn in Greek debt on their books, including loans to private individuals and companies, according to Bank for International Settlements data for the third quarter of 2009. Among EU countries, only France's banks, a larger share of Greece's $303bn in debt to foreign banks.
Speaking before the opening of an EU summit in Brussels, Herman Van Rompuy, the EU’s permanent president, said that Eurozone countries called on Greece to “implement in a rigorous and determined manner” its plan to eliminate its budget deficit by 2012 and also apply “additional measures.” This would include cutting the deficit by 4% of GDP (gross domestic product) in 2010.
Van Rompuy said Eurozone finance ministers would formally endorse Greece’s deficit-cutting plan at a meeting on Monday, February 15th. The European Commission would “closely monitor” implementation in liaison with the European Central Bank and “drawing on the expertise of the International Monetary Fund. A first evaluation would take place next month."
The president said Greece had “not requested any financial support” from its fellow Eurozone members. But the agreement lays out a set of guidelines that Greece will be expected to follow if it were to be given financial support, most likely from Germany, France and some other Eurozone countries, at some stage in the future.
“All euro area members must conduct sound national policies in line with the agreed rules,” Van Rompuy said. “We have a shared responsibility for the economic and financial stability in the area.”
After a pre-summit meeting with President Nicolas Sarkozy of France and German Chancellor Angela Merkel, Van Rompuy, said he would present the terms of the agreement to other EU leaders gathering in Brussels.
Also present at that meeting were GeorgiosPapandreou, the Greek prime minister, Jean-Claude Trichet, the ECB president, and José Manuel Barroso, president of the European Commission.
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| Taoiseach Brian Cowen arriving for the EU summit in Brussels, Thursday Feb 11, 2010 |
Also in Brussels to day European leaders are seeking commitment to the aim of implementing a renewed economic strategy for employment and growth in the EU and at the same time will debate how to help Greece resolve its budgetary crisis.
The informal summit, the first under the presidency of the Beligan, Herman Van Rompuy, began after 13:00, three hours later than the scheduled time, on account of the bad weather in Brussels and the meeting about Greece.
The European Council president has called this extraordinary meeting to allow the twenty-seven member states to analyse their economic plans for the coming years.
In calling this meeting, Van Rompuy stated that the economic crisis "has increased the sense of urgency to refocus our efforts and to enhance our co-ordination."
The EU Council president will outline some of the ideas he heard from European leaders during his round of visits to member state capitals.
Van Rompuy believes that all the Union's economies are facing major challenges, given that structural growth is not sufficiently high to create employment and to maintain the European social model.
During the meeting, the president of the European Commission, José Manuel Durao Barroso, will explain the specific proposals the EU executive branch expects to approve in early March.
European leaders will also analyse possible tactics for future global negotiations to deal with climate change issues, based on the outcome of last December's Copenhagen Conference.
The third major issue to be discussed at the meeting is Haiti, where the EU aims to follow its immediate rescue operations with a long-term reconstruction strategy.
This summit will be the first such meeting under Van Rompuy's presidency, in full application of the Lisbon Treaty.
