Jose Manuel Barroso

In an interview with Germany’s Handelsblatt business daily, the president of the European Commission Jose Manuel Barroso called on European leaders to back the Commission’s proposal for a system of coordinated bilateral loans to be made available to Greece during thursday’s European Union summit in Brussels.

We need a decision at this summit on how to deal with Greece, otherwise the heightened uncertainty will go on and on. We can’t carry on as we are, as this would threaten the stability of the euro zone and encourage speculation.

Barroso made clear that the plan did not break the ‘no bailout’ clause in the European Union treaty, and also commented on Germany Chancellor Angela Merkel‘s decision to vet any financial aid to Greece, in the basis that any form of bail-out would be impossible in terms of the European Union’s Maastricht treaty and German constitutional law.

Securing the stability of the currency union is in Germany’s interest. I’m sure Germany will make a constructive contribution to resolving the current crisis. We need both solidarity and stability. Without solidarity there is no Union. And stability is in everyone’s interests.

Angela Merkel

A senior German official said on Thursday the government in Berlin still believed that the debt-burdened government in Greece would be able to manage without external financial help. “But if it does need help, it will have to come from the IMF,” he added. The chancellor had decided that any other solution would be legally and constitutionally impossible.

Germany’s Chancellor Angela Merkel warned that euro expulsion should be raised against repeated fiscal offenders.

In the future we need a treaty entry that would make it possible, as a last-resort, to exclude a country from the euro zone if the conditions are not fulfilled again and again over the long term. Otherwise cooperation is impossible.

David Campbell

David Campbell Bannerman from Britain’s UK Independence Party also commented on the matter to the television station RT.

There does need to be a bailout for Greece. They are talking about a massive sum of €25 billion here. But the real problem of Greece might be bigger – the estimates say it might need as much as €55 billion by the end of this year. It’s hard to come to any satisfactory agreement. We just think the Euro is not sustainable when you have a weak economy like Greece tied in to strong economies like Germany. It just doesn’t work

We believe the Euro will collapse either totally or in part. This is the first of a number of countries, it’s not just Greece. They call them ‘the pig states’ – not a nice term, but they are, apart from Greece, also Portugal, Italy, Ireland, and Spain. Having a 44% unemployment rate among its young, Spain could well be next.

During thursday’s talks, Greek Prime Minister George Papandreou has said he will push for a clear-cut statement on how the EU would help his country if it were to request financial assistance.

The euro fell to a 3-week low against the U.S. dollar on Monday, as European leaders remained divided on whether their nations should provide debt-laden Greece with financial aid.

Shortly before the European trading session, EUR/USD broke below the 1.35 mark to hit 1.3498, the pair’s lowest rate since March 2. It subsequently consolidated around 1.3515, shedding 0.12%.