Eurozone officials did not recommend member countries prepare for Greece’s possible departure from the single currency, the Greek government has insisted.
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A statement issued by the country’s government said: “The Greek finance ministry categorically denies the reports that it was requested during a Eurogroup telephone conference that eurozone members prepare plans for handling the possible exit of Greece from the eurozone.”
Speaking as he arrived in Brussels for a meeting of European leaders, British Prime Minister David Cameron said: “We need a decisive plan for Greece to help get the European economies moving.
“But if we’re not going to keep coming back – and back – to meetings like this, we also need to deal with some of the longer-term issues at the heart of running a successful single currency.”
Meanwhile, French President Francois Hollande is expected to flex his political muscles at the meeting, as he pushes back against austerity in the eurozone.
It was anticipated he would propose a series of measures to promote growth when he meets the EU’s 26 other leaders at an informal dinner organised by the European Council.
The informal summit comes amid increasing market uncertainty about Europe’s ability to resolve the crisis, with main stock exchanges and the FTSE 100 in London down by 2% in Tuesday trading.
The leaders are discussing ways to fund large-scale projects in Europe, including jointly backing bonds for specific schemes and pumping more capital into the European Investment Bank, which is the lending arm of the European Union.
But senior diplomatic sources say Mr Hollande also wanted to bring more controversial proposals to the table including so-called eurobonds, jointly backed by all eurozone countries, which Germany adamantly opposes.
He is also raising the issue of a Europe-wide financial transaction tax, which the UK refuses to countenance.
Other countries, including Sweden, the Netherlands and Ireland, also have reservations about such a scheme, which the commission supports.
Sources suggest tonight’s dinner will produce little in terms of concrete policy announcements, but will “shape the discussions” leading up to a formal EU summit on June 28.
However, they suggest the summit will mark a fundamental shift in the political underpinning of the EU as the dominant Franco-German partnership of Angela Merkel and Nicolas Sarkozy has now been dismantled.
Together they pursued belt-tightening in indebted countries as the main prescription for the ailing eurozone, but now the German Chancellor is increasingly isolated as Mr Hollande appears to be heading a new coalition of those who favour a more nuanced approach.
That includes Italian Prime Minister Mario Monti and European Commission president Jose Manuel Barroso who believe Europe needs to balance cuts with more aggressive measures to stimulate growth.
But Germany, as the eurozone’s powerhouse, still wields considerable influence over the EU.
The main question is whether Ms Merkel will drop her resistance to EU financial institutions, such as the European Central Bank, or the temporary and permanent bailout funds becoming more actively involved, by buying up debt or pumping cash directly into banks.
Mr Cameron is expected to restate his view that the eurozone needs to prepare carefully for a Greek exit from the EU to prevent the shockwaves from harming the UK – and global – economy.
Mr Cameron is also backing a commitment to improving growth and competitiveness in Europe, which he believes will aid Britain’s stagnant economy.
Speaking on Jeff Randall Live, Guy Verhofstadt, former Prime Minister of Belgium and currently a Member of the European Parliament, said of the EU Summit: “I don’t expect real solutions.
“The only thing I hope is that European leaders in Europe recognise that they can’t solve this euro crisis with half measures, and I hope that they recognise that only eurobonds – a mutualisation of the debt – can solve this crisis.
“Germany has the choice; either in the next months they accept eurobonds, or it can be the end of the euro. Greece leaving the eurozone is the worst scenario because the eurozone is not prepared for it.
“What we need is a real firewall around the eurozone and this firewall doesn’t exist for the moment.”
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