Vague Pledge of Support for Greece

The European Council president promised to provide “determined and coordinated action” to Greece if needed.

European Union leaders convened in Brussels Thursday to discuss the Greek debt crisis. European Council President Herman Van Rompuy promised that the eurozone would provide “determined and coordinated action if needed” to preserve the currency’s stability although Greece, according to Van Rompuy, “did not ask for any financial support.”

Europe’s southern member state has been struggling with grave fiscal deficits and a heavy debt burden, sparking fear that at some point, the country might actually have to declare bankruptcy. The summit is meant to assure financial markets that the EU won’t let that happen. Van Rompuy spoke of the eurozone’s “shared responsibility” but whether this vague pledge of support did the trick is doubtful. After the Council President read his statement, the euro slipped slightly to an eight-month low of $1.37. The currency traded at $1.51 last December.

Van Rompuy stated that Greece will adopt “additional measures” to gets its budget under control. “We call on the Greek government to implement all these measures in a rigorous and effective manner,” he said.

No concrete aid was announced though. European leaders are reluctant to actually bail out Greece. Especially Germany, which, as Europe’s largest economy, would be forced to take the brunt of such a rescue effort, doesn’t care much to help out the nation that for many years violated European rules against overspending.

At the same time, Europe is wary of letting the International Monetary Fund extend help for such interference would be seen a sign of weakness on the union’s part.