EU ministers meet amid talk of Greek debt struggle

Click to follow
The Independent Online

Emergency talks were held last night among European Union finance ministers amid rising speculation Greece would be unable to meet its debt repayment obligations.

Ministers from Germany, France, Italy and Spain met in Luxembourg for a "broad discussion about Greece" before talks about restructuring the payments at a meeting arranged for 16 May.

Jean-Claude Juncker, chairman of the Eurogroup which oversees the Euro currency, denied, however, that restructuring had been addressed last night.

He also dismissed German media reports that Greece was threatening to withdraw from the Euro and restore the Drachma as its official currency.

"We have not been discussing the exit of Greece from the euro area. This is a stupid idea, it is an avenue we would never take," Juncker said.

"We don't want to have the euro area exploding without reason. We were excluding the restructing option, which is discussed heavily in certain quarters of the financial markets."

European Central Bank President Jean-Claude Trichet and Olli Rehn, the European commissioner for economic and monetary affairs, were also at the meeting, but it was unclear whether the Greeks, who were invited, had anyone attending. The talks are also understood to have touched on Portugal's financial condition and surrounding G20 issues.

Earlier, the Greek Finance Ministry had denied suggestions the country wanted to abandon the Euro: "The report about an impending exit of Greece from the euro zone is untrue. Such reports undermine the efforts of Greece and the euro and serve market speculation games."

Greece's financial position has been precarious since the European Union had to offer a €110bn bailout to enable the country to stave off financial collpase. It has a €327bn debt load, which it is struggling to cope with.

Leaving the Euro would be enormously costly for Greece's reputation and economy and would be likely to prompt a run on some of its banks.

But it could allow it to devalue its currency to head off the social unrest and public anger caused by the austerity measures.