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UPDATE 1-EU's Van Rompuy: euro zone to guard stability

Published 02/11/2010, 07:56 AM
Updated 02/11/2010, 08:00 AM
TRY/EUR
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* Euro zone to act to guard financial stability if needed

* Greece must cut budget gap by 4 percentage points in 2010

* More austerity needed, to be outlined by EU Commission

BRUSSELS, Feb 11 (Reuters) - The euro zone will take coordinated action if necessary to safeguard its financial stability, European Union President Herman Van Rompuy said on Thursday as EU leaders discussed how to help debt-laden Greece.

"Euro area member states will take determined and coordinated action if needed to safeguard stability in the euro area as a whole. The Greek government has not requested any financial support," Van Rompuy told reporters.

He was speaking after a meeting with several top officials from the 16-country euro currency area at which they agreed on a deal to help Greece with its debt problems.

Van Rompuy said Athens had to implement all agreed deficit-cutting measures to reduce its budget gap by 4 percentage points in 2010, as recommended by the executive European Commission.

More steps will be needed, he said.

"The Commission will closely monitor the implementation of the recommendations in liaison with the European Central Bank and will propose needed additional measures, drawing on the expertise of the International Monetary Fund," Van Rompuy said.

A first assessment will be carried out in March, he said.

"All euro area members must conduct sound national policies in line with the agreed rules. We have a shared responsibility for the economic and financial stability in the area," he said in a statement before meeting with the 27 EU leaders.

"In this context we fully support the efforts of the Greek government and their commitment to do whatever is necessary including adopting additional measures to ensure that the ambitious targets set in the stability programme for 2010 and the following years are met," he said.

Shortly before his statement, Van Rompuy said several key euro zone officials had reached a deal to help Greece.

The agreement was forged in talks between Van Rompuy, European Commission President Jose Manuel Barroso, French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank President Jean-Claude Trichet and Greek Prime Minister George Papandreou.

Spanish Prime Minister Jose Luis Rodriguez Zapatero and Eurogroup Chairman Jean-Claude Juncker were also present.

"There is an agreement on the Greek situation. We will communicate now the agreement to the other leaders," Van Rompuy told reporters. (Reporting by Jan Strupczewski, Noah Barkin and Bate Felix, editing by Dale Hudson)

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