Brussels: The leaders of France and Spain headed a last-ditch diplomatic push on Thursday to get German Chancellor Angela Merkel to back a financial safety net for Greece as a European Union summit opened in Brussels.
Ms. Merkel has emerged as the make-or-break player in the EU's debate on whether and how to offer Greece support, clashing head-on with France, Spain and the European Commission. The row has eclipsed the summit's official agenda of economic reform.
“The euro is an extremely important currency, it's important to have a strong currency. It's important to have a clear European solution,” Spanish Premier Jose Luis Rodriguez Zapatero said.
Greece wants the promise of an emergency loan — as distinct from a loan itself — to reassure markets that it will not default. Greek premier George Papandreou hopes that that will convince lenders to drop the over 6 per cent risk premium they charge his government.
“We need to put the loaded gun on the table to make sure that the markets will respond in a positive manner,” he said last week.
Spain, France and the commission, the EU's executive, back that call, with Zapatero and French President Nicolas Sarkozy demanding a eurozone summit on the fringes of the EU summit to settle a deal.
“It's unthinkable that we bring together European leaders without speaking on this issue and reaching consensus, because it's an urgent problem that we have to solve and I hope that eurozone leaders will find a solution,” commission chief Jose Manuel Barroso said.
But Merkel insists that any loan offer could only come once Greece has exhausted all other options for raising money, and only with the support of the InternationalMonetary Fund (IMF). – DPA