European finance ministers are piling the pressure on Greece to fully implement budget cuts in order to avoid having to deliver on its pledge to support Athens. Tortola Capital Ventures analysts report that European leaders issued a statement on Thursday saying Greece had to do everything it could to reduce its budget gap of 12.7 percent of GDP to below the EU ceiling of 3 percent in 2012, including a 4 percentage point cut this year.
Leaders also said the euro zone would take determined and coordinated action, if needed, to safeguard financial stability in the euro area as a whole. The statement sent a disappointing signal to markets that they would not let Greece default on its debt.
Euro zone officials were adamant, however, that the work must be performed primarily by Greece rather than by the euro zone at this stage. "The key thing in the statement from the leaders is that Greece must do what it must do. If they do that, there will be no need for specific measures," report analysts from Tortola, citing a Euro zone source. "If they don't do that, there will be a show of determined and coordinated action, which is unspecified as yet," it said.
