Europe leaders hold Greece talks

Eurozone leaders gather in Brussels to discuss measures to tackle debt crisis.

    Austria's Federal Chancellor is one of the European officials gathering in Brussels [AFP]

    "We have to make provisions for the stability of the euro by stating firmly that it is our common currency, but also by sharpening the Stability and Growth Pact, including possible treaty changes," Merkel said, referring to a EU agreement which sets limits on the deficits of member states.

    Better co-ordination

    Werner Faymann, the Austrian chancellor, told reporters that he supports creating a European monetary fund, a governing body that would help co-ordinate economic policy across the EU.

    "I think there's a real sense among European leaders that they have to do their utmost to contain the contagion," Al Jazeera's Barnaby Phillips, reporting from Athens, said.

    in depth
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      Q&A: Greek economic crisis
      The Greeks are angry
      Sacrifice and suffocation for Greece
      The humiliation of Greece
      People & Power: The bankrupt state
      Inside Story: A financial bailout for Greece?
      Counting the Cost: Greece is the word
      Greek protests turn deadly
      Greece hit by anti-austerity rally
      Wake-up call for Greek economy
      Fears grow over debt crisis

    The call came shortly after Germany's parliament agreed to provide up to $28.6bn over three years as their contribution to an emergency loans package for debt-ridden Greece.

    The lower house's decision on Friday followed days of delays. The loan package for Greece is funded jointly by the European Union and International Monetary Fund.

    The bill was passed by 390 votes in favour and 72 against, with 139 MPs abstaining.

    Wolfgang Schauble, Germany's finance minsiter, told the lower house of parliament that the contribution had to be approved in order to preserve the euro currency.

    "Any other alternative would be much more expensive for the Germans, would be much more dangerous, would carry much bigger risks," Schaeuble said.

    He said experts agreed that "it would be disastrous to risk ... a member of the European currency union, Greece, now becoming insolvent".

    Markets hit

    The bill will now go to the parliament's upper house and then to Horst Koehler, the president, before becoming law.

    Germany's contribution is part of a $146bn package to bail out Greece, which is struggling to access money on the open market, where it is increasingly viewed as a risky investment.

    Late on Thursday, France's senate approved their nation's contribution to the EU loan package, providing up to $22.5bn over the next three years.

    The debt crisis in Europe has caused fears that finance will dry up in other areas of the world. The Bank of Japan said on Friday that it would offer two trillion yen ($22bn) in short-term loans to commercial banks to boost liquidity.

    Other Eurozone nations - particularly those with high debt, such as Spain, Portugal and Italy - worry that they'll be unable to find financing. Spain did announce on Friday that it had formally pulled out of recession in the first quarter of 2010, with growth of 0.1 per cent.

    SOURCE: Al Jazeera and agencies


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