EU promises help for Greece, but euro falls in absence of bailout
European Union (EU) leaders promised on Thursday that they stand waiting to help debt-laden Greece, if needed. But the euro declined as investors worried about the lack of a clear commitment to a bailout package.
Germany's Chancellor Angela Merkel (l.), Greece's Prime Minister George Papandreou (c.) and France's President Nicolas Sarkozy (r.) leave the EU Council building after a meeting before an informal summit of European Union heads of state and government in Brussels Thursday.
Yves Herman/Reuters
Paris
Arguing in the midst of a eurozone crisis that troubled Greece has not asked to be bailed out, EU leaders stood together today to say that the “Europeans pledged to help out Greece – if needed.” They settled on a ready-to-jump-in strategy to back the southern state – if markets are not reassured and if the euro falls further.
The euro, which has weakened against the dollar since the end of last year on concerns that Greece's debt problems could spread, fell in afternoon trading with investors disappointed that a clear bailout package for Greece did not emerge from the meeting.
The comments after EU heads of state met in Brussels is seen as something of a halfway strategy -- designed to buy time and stave off perceptions of disarray in the eurozone, including a possible humiliating IMF bailout of Greece.
The decision fell short of offering loans and/or loan guarantees to Greece expected by France and a reluctant Germany – and allows Greece to avoid a damaging appearance of insolvency. The EU leaders appear to be hoping that their statement of solidarity will change market perceptions of Greek weakness, following revelations of improper reporting of its true debt position and gross domestic product (GDP) figures.
"If we say things clearly enough, we won’t need to do anything,” a source in the French presidential palace told Le Monde on Thursday afternoon.
