EU's Van Rompuy Says It's Now Up To Greece To Agree Program
(Adding details from 5th paragraph.)
By Eamon Quinn
Of DOW JONES NEWSWIRES
DUBLIN (Dow Jones)-European Council President Herman Van Rompuy said Friday it's now up to the Greek government, its parliament and the people to agree the terms of a new program with its lenders.
He was speaking to journalists after meeting Irish Prime Minister Enda Kenny, discussing the debt problems of the euro zone ahead of a summit of European Union leaders next week.
Austerity reforms were "necessary in Ireland and elsewhere" for countries to emerge from the debt crisis, he said.
Van Rompuy said that the EU's new program for Greece will include financing by the private sector. But the program will not cross two "red lines"--that it will not trigger a credit event or lead to a credit default, he said.
"Important decisions have to be taken in the next few days on both sides--Greece and the euro area," he said, calling on all Greek parties to act "in a united manner at this crucial juncture".
Subject to such an agreement, the IMF will be able to disburse the next tranche of aid to the country, Van Rompuy said.
He said the euro is "in good shape" compared with other currencies. The level of public debt is lower in the euro area as a whole than in the U.S., U.K. and Japan and that the single currency area's prospect for economic growth was "quite good".
Turning to Ireland, he said the Irish bailout was "on track", and the country will build on its economic strengths.
There were "real" chances for Ireland to agree a lower rate on its bailout loans, but he did not say when any agreement will be reached.
Since coming to power in March, the new Irish coalition government has sought to reduce the near-6% interest rate the country is paying on its EUR67.5 billion bailout loans to the EU and IMF.
The escalating cost of its bank rescue plan forced Ireland into a bailout last November when markets refused to lend the country and its banks more money.