BRUSSELS (AP) — European Union officials were reluctant Thursday to promise help to debt-saddled Greece, saying it was up to Athens to put its economy back on track.Swedish Prime Minister Fredrik Reinfeldt, whose country holds the rotating EU presidency, said Greece's trouble was "basically a domestic problem and has to be addressed by domestic decisions." He spoke before leading talks between European Union leaders at a Thursday summit in Brussels.Greece's government debt was downgraded to the worst of the 16 nations that use the euro by Fitch Ratings on Tuesday, over worries that the country was not tackling a ballooning budget deficit.German Chancellor Angela Merkel said the 16 nations that use the euro were limited in what they could do to get one of them to stick to the strict EU debt and deficit limits that stabilize their shared currency.Greek Prime Minister George Papandreou has called on opposition leaders to hold rare joint talks on the troubled economy, saying President Karolos Papoulias has agreed to chair the meeting.Greece has allowed its budget deficit to swell to four times the European Union limit. The government admits it is the highest debt in modern Greek history — at some €300 billion ($442 billion).Papandreou urged opposition leaders Thursday to help address what he said was "a crucial phase" for the country.Left-wing opposition parties however have indicated they will fight any austerity measures. Greece may have to make heavy cuts to public spending on social welfare or health care to bring its deficit down from a massive 12.7 percent of economic output this year to below the 3 percent limit fixed by EU budget rules.The new socialist government has promised to step up efforts and win back credibility in the country's economy after saying the 2009 deficit would be more than double an earlier target."The question arises of what authority Europe actually has to give national parliaments any task," Merkel told reporters in Bonn, Germany.Finnish Prime Minister Matti Vanhanen was far blunter, saying the "the EU cannot helpGreece, it is part of the rule ... (that) encourages member states to take care of their own finances."However, Belgian Finance Minister Didier Reynders said some kind of EU aid was possible as a last resort but it was preferable for the country to take action itself."That was always possible," he said. "We will obviously try to come out of this without any manifest repercussions on the currency we share."EU officials have hinted that they have a plan to bail out a eurozone nation that risks going bankrupt — but have refused to give details.In practice, the European Central Bank has buoyed weaker economies by offering unlimited liquidity to banks, such as those in Ireland. Irish Finance Minister Brian Lenihan said this sort of help had warded off a possible economic collapse last year.ECB President Jean-Claude Trichet told the Belgian daily De Tijd on Thursday thatGreece had to make "necessary and brave" decisions to restore confidence in its economy."That confidence is an important condition for recovery," he said.EU finance ministers told Greece last week to draw up a new debt reduction plan in January so they can discuss setting a deadline for bringing the deficit under 3 percent.
BRUSSELS (AP) — European Union officials were reluctant Thursday to promise help to debt-saddled Greece, saying it was up to Athens to put its economy back on track.
Swedish Prime Minister Fredrik Reinfeldt, whose country holds the rotating EU presidency, said Greece's trouble was "basically a domestic problem and has to be addressed by domestic decisions." He spoke before leading talks between European Union leaders at a Thursday summit in Brussels.
Greece's government debt was downgraded to the worst of the 16 nations that use the euro by Fitch Ratings on Tuesday, over worries that the country was not tackling a ballooning budget deficit.
German Chancellor Angela Merkel said the 16 nations that use the euro were limited in what they could do to get one of them to stick to the strict EU debt and deficit limits that stabilize their shared currency.
Greek Prime Minister George Papandreou has called on opposition leaders to hold rare joint talks on the troubled economy, saying President Karolos Papoulias has agreed to chair the meeting.
Greece has allowed its budget deficit to swell to four times the European Union limit. The government admits it is the highest debt in modern Greek history — at some €300 billion ($442 billion).
Papandreou urged opposition leaders Thursday to help address what he said was "a crucial phase" for the country.
Left-wing opposition parties however have indicated they will fight any austerity measures. Greece may have to make heavy cuts to public spending on social welfare or health care to bring its deficit down from a massive 12.7 percent of economic output this year to below the 3 percent limit fixed by EU budget rules.
The new socialist government has promised to step up efforts and win back credibility in the country's economy after saying the 2009 deficit would be more than double an earlier target.
"The question arises of what authority Europe actually has to give national parliaments any task," Merkel told reporters in Bonn, Germany.
Finnish Prime Minister Matti Vanhanen was far blunter, saying the "the EU cannot helpGreece, it is part of the rule ... (that) encourages member states to take care of their own finances."
However, Belgian Finance Minister Didier Reynders said some kind of EU aid was possible as a last resort but it was preferable for the country to take action itself.
"That was always possible," he said. "We will obviously try to come out of this without any manifest repercussions on the currency we share."
EU officials have hinted that they have a plan to bail out a eurozone nation that risks going bankrupt — but have refused to give details.
In practice, the European Central Bank has buoyed weaker economies by offering unlimited liquidity to banks, such as those in Ireland. Irish Finance Minister Brian Lenihan said this sort of help had warded off a possible economic collapse last year.
ECB President Jean-Claude Trichet told the Belgian daily De Tijd on Thursday thatGreece had to make "necessary and brave" decisions to restore confidence in its economy.
"That confidence is an important condition for recovery," he said.
EU finance ministers told Greece last week to draw up a new debt reduction plan in January so they can discuss setting a deadline for bringing the deficit under 3 percent.