Europe Will Do 'All It Takes' To Keep Greece In Euro, Says Jose Manuel Barroso

PA/The Huffington Post UK  |  Posted: Updated: 17/05/2012 17:54

Europe will do all it takes to keep Greece in the single currency, European Commission president Jose Manuel Barroso has said.

He told the United Nations in New York that EU financial commitments towards Greece will be honoured - in return for Greece keeping to the terms of the bailout deals designed to keep the country solvent.

Mr Barroso, addressing the UN General Assembly on his way to the G8 summit at Camp David, also defended Europe's response to the economic crisis as "robust", insisting the EU would maintain its policies - without being "blind" to evolving circumstances.

"I would like to reaffirm very clearly that we want Greece to stay in the euro area, and the European Union will do all it takes to ensure it," he said.

"We will honour our commitments towards Greece and we expect the Greek government - current and future - to fulfil the jointly agreed conditions for financial assistance.

"We fully respect the will of the Greek people but also the will of the sixteen euro area countries which, through their parliaments, have agreed on the conditions of financial assistance."

Mr Barroso explained how Europe had suddenly been confronted by "a financial crisis which spread into an economic crisis", while having to fix its internal economic and financial governance structures at the same time.

But a lot had been done in the last two years, he said, adding: "In Europe we are delivering a robust response to the crisis by repairing our banking system; strengthening our economic governance; setting up credible financial firewalls and providing unprecedented solidarity to member states in difficulty."

It was a "twin track approach of stability and growth", restoring sustainability to public finances and creating jobs, structural reform and targeted investment.

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Barroso insisted: "There must be no let-up in our focus on stability. We need to stay the course, without being blind to an evolving economic situation.

"Fortunately, the rulebook allows for adaptability while remaining firmly focused on sustainability and ensuring sound public finances."

He said debt and deficit reduction was essential to build confidence and cut borrowing costs, while the EU's financial "firewall" - the bailout fund - stood at 500 billion euro (£400 billion).

Europe had plans to boost competitiveness, deepen the single market, and step up investment through "project bonds" to attract billions of euros to plough into transport, energy and digital improvements.

"Given this list of actions I believe that, in spite of all the difficulties, we are on the right track. We are doing a root-and-branch reform of our budgetary and economic policies. And, beyond 'the sound and the fury', we are making good progress in laying firm foundations for strong economic recovery and sustainable growth."

Mr Barroso added: "The important thing to understand in Europe's response - and that commentators often underestimate - is that the euro is much more than a mere monetary construction: it is the product of a project of peace and reconciliation which was at the origins of the European integration.

"This project of peace still is what unites us beyond the momentary difficulties."

It comes after David Cameron said survival of the European single currency is in question, creating "huge risks" for Britain's economy.

In his starkest warning yet of the possible failure of the euro, Cameron said that the single currency now stands "at a crossroads" and must choose between "make up" or "break up".

He promised to do "whatever is necessary" to keep Britain safe if the euro falls apart.

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