Tags: AS | Japan | EU

EU President: Greece Will Get Aid in Time

Wednesday, 28 Apr 2010 08:44 AM

The European Union's president said Wednesday he is fully confident that Greece will receive on time financial assistance it needs to address its debt problems and to preserve the eurozone stability.

Negotiations on a euro 45 billion rescue package "are on track" among the EU, European Central Bank, IMF and the Greek government, President Herman Van Rompuy said. He reiterated plans to call a eurozone summit by May 10 at the latest.

"I would like to recall the strong commitment of the euro area member states at the highest level to take the necessary steps to ensure financial stability of the euro area as a whole," Van Rompuy told a news conference in Tokyo after meeting with Japanese Prime Minister Yukio Hatoyama.

Greece is struggling with massive debts, and weak prospects for economic growth mean it could end up defaulting.

Global financial markets have tumbled this week despite plans for a package for Greece from its 15 eurozone partners and the International Monetary Fund. The crisis has disrupted cooperation between eurozone governments, with Germany resisting bailing out Greece unless strict conditions are met.

Concerns about Europe intensified when Standard & Poor's downgraded Greece's debt to junk status and hit Portugal with a two-notch rating cut, raising concerns of a wider financial contagion.

Van Rompuy stressed the need to preserve the stability of the eurozone. He ruled out any restructuring of Greek debts, calling it "out of the question."

The crisis also threatens to undermine the euro and make it harder and more expensive for all eurozone governments to borrow money.

In Asian trading Wednesday, Japan's Nikkei 225 stock average led the region-wide retreat with a 2.6 percent drop, while Hong Kong's Hang Seng index shed 1.3 percent. In New York Tuesday, the Dow Jones industrial average fell 1.9 percent to 10,991.99 in its worst loss in almost three months.

Van Rompuy, a 62-year-old former Belgian prime minister, was chosen to be the EU's first president last November after the Lisbon Treaty established the post to accelerate EU decision-making.

Stressing Japan and the 27-nation EU's shared common commitment to democracy and market economics, Van Rompuy called for closer cooperation on trade, foreign policy, global network security and climate change.

Later Wednesday, Van Rompuy and Hatoyama agreed to launch bilateral talks to discuss the creation of a free trade agreement between the two regions.

At an earlier news conference, he said a lot of work would be needed to achieve an agreement.

Van Rompuy also said the EU was keen to cooperate with Japan on reconstruction and reconciliation efforts in Afghanistan, such as working together in training police.

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