EU working on mechanism to help Greece if needed, Barroso says

13:47, March 10, 2010      

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The European Commission is working with eurozone member states on a mechanism to help Greece if there is a need, commission chief Jose Manuel Barroso said on Tuesday.

"The commission has been actively working with euro area member states to design a mechanism which Greece could use in case of need," Barroso told a plenary session of the European Parliament in Strasbourg, France.

"Such a mechanism would be in conformity with the current Lisbon Treaty, in particular with the no bail-out clause. It would include stringent conditionality," he added, without disclosing further details.

Barroso said Greece has taken the necessary measures to reduce its government deficit this year and the commission is also doing what is necessary to secure the financial stability of the euro area as a whole.

He indicated the commission would soon propose to set up a European version of the International Monetary Fund (IMF) to coordinate assistance to a member state when it runs into a debt crisis like Greece.

A commission spokesman confirmed the idea of European Monetary Fund on Monday, but he said negotiations on the details of the fund may be wrapped up as early as in June, which means it would not be in time for Greece.

Barroso said the commission is in parallel preparing a communication on reinforced economic policy coordination and country surveillance after the Greek debt crisis exposed serious defect of lacking economic governance in the EU.

Source: Xinhua

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