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Barroso warns markets to act on "fact not fiction" after Greek bail-out package is agreed

Monday 29 March 2010 - by Andrew Naylor

Eurozone leaders have backed a plan to provide financial assistance to Greece.

Under the terms of the plan, the International Monetary Fund and Eurozone member states have agreed, as a last resort, to provide bilateral backup loans to Greece, which has been struggling to finance its national debt.

Speaking after the Council meeting in Brussels on 25 March, European Commission President José Manuel Barroso said: "Regarding Greece, I just want to underline the point that I now hope that financial markets act on fact not on fiction."

In addition to the announcement, Eurozone member states have called for a strengthening of economic and budgetary risk surveillance and prevention measures.

Following the Council meeting, European leaders issued a statement saying: "The current situation demonstrates the need to strengthen and complement the existing framework to ensure fiscal sustainability in the euro zone and enhance its capacity to act in times of crises.



"For the future, surveillance of economic and budgetary risks and the instruments for their prevention, including the Excessive Deficit Procedure, must be strengthened.

"Moreover, we need a robust framework for crisis resolution respecting the principle of member states' own budgetary responsibility."

Prior to the European Council meeting Angela Merkel, Chancellor of Germany, called for greater action to reduce budget deficits across the Eurozone saying there is "no alternative" to sound Government finances.

Addressing the German Bundestag, Merkel said: "We cannot afford to water down the Stability Pact."

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