EU 'fully trusts' Greece will stick to eurozone commitments



Greece's Prime Minister George Papandreou briefs the media after a meeting with European Council President Herman Van Rompuy in Brussels. REUTERS Photo.
European Union leaders on Tuesday said they "fully trust" Greece will stick to commitments to its eurozone partners to reduce spending in return for new rescue funding.
In a statement issued after the surprise announcement of a referendum in Greece, EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso said: "We fully trust that Greece will honour the commitments undertaken in relation to the euro area and the international community." The two said they "took note" of Prime Minister George Papandreou's decision to hold the vote and said they had been in telephone contact with the Greek premier.
They said they were in contact with members of the 17-nation eurozone and would continue to be in contact on the margins of the G20 meeting this week in Cannes.
The joint statement also said of a deal reached at a summit last Thursday to pull back Greece from the brink that "we are convinced that this agreement is the best for Greece." After marathon talks over days and a summit that dragged on into the early hours Thursday, the eurozone agreed a package deal including beefing up its rescue fund to a trillion dollars, strengthening banks and forcing banks to share the pain in Greek debt losses.
"We are working on the implementation of those decisions, which are more necessary than ever, without delay," Van Rompuy and Barroso said.
The new rescue programme for Greece involves 100 billion euros funded by the EU and the IMF, an agreement with the private sector to bring Greek debt on to a sustainable path, and providing a 50 percent write-off of debt held by private creditors -- worth around another 100 billion euros.
Eurozone states too agreed to contribute to measures relating to the private sector to the tune of 30 billion euros -- adding up to a 230 billion euro package for Athens.
The aim of the rescue, coupled with reforms in Greece, is to reduce the debt level to 120 percent by 2020.
"This substantive reduction would alleviate the burden on the Greek budget and would therefore support growth and jobs policies," the two EU leaders said.