13 Feb 2010

EU deal on helping Greece

8:56 am on 13 February 2010

EU leaders have reached a deal on helping Greece tackle its debt crisis.

European Council president Herman Van Rompuy gave no further details, but all 27 EU members are to discuss it at a summit meeting in Brussels on Thursday.

German Chancellor Angela Merkel said Greece will not be left on its own.

The BBC reports the debt crisis has put pressure on the euro, making markets nervous. EU rules prevent the eurozone from collectively bailing out Greece.

Other countries with big deficits in the 16-nation eurozone, such as Portugal and Spain, are seen as vulnerable if Greece's problems are not tackled resolutely.

Greece's 12.7% deficit is more than four times higher than eurozone rules allow.

State debt is about 300 billion euros ($US419 billion), and the government estimates it will need to borrow about 53 billion euros this year to cover budget shortfalls.

Debt servicing costs Greece 11.6% of its gross domestic product.