Greece under debt pressure at eurozone talk

Greece confirmed last week it was still in recession in the last quarter of 2009. The euro zone as a whole barely grew as German economic growth halted and Italy and Spain also registered drops in GDP, making both deficit reduction and the provision of aid politically all the more challenging.

Jean-Claude Juncker, chairing Monday's talks, echoed Rehn's remarks and noted that European leaders had pledged support at a summit last Thursday on the condition that Greece stuck firmly to viable plans to fix its finances.

"We will have a discussion on the basis of what the European Council (summit) agreed upon," said Juncker, who is Luxembourg prime minister and chairman of the so-called Eurogroup forum where ministers confer regularly on pan-European matters.

"It is clearly mentioned that Greece has to make sure that it cuts it budget deficit for 2010 by four percent and we have to check if this is possible or not and it will all depend on the answers given to that crucial question," he said.

EU leaders are hoping that pressure and a concerted effort by Greece will be enough to get on top of the country's deficit and debt problems and assuage markets.

Although leaders said little of how they may help, they have said they are ready to take "determined and coordinated" action to safeguard financial stability in the euro area if needed.

That was designed to send a signal to the bond and currency markets -- where Greek bond yields have risen and the euro has weakened -- that Greece will not be allowed to default on its debt and that the euro is not threatened.

LOW ON DETAIL

The lack of specifics has left markets with a reason to discount both Greece and the euro.

In a statement after the EU leaders' summit last week, European Central Bank President Jean-Claude Trichet noted Athens' commitment to do whatever was necessary, "including adopting additional measures" to ensure its budget deficit cut target was implemented.