Global General

EU to call for more reforms in Greece

By Fu Jing (China Daily)
Updated: 2011-06-24 08:19

BRUSSELS - The European Union summit scheduled to open in the Belgian capital on Thursday night is expected to call on the government of debt-racked Greece to show an even stronger commitment to spending cuts and economic reforms.

Along with the Greek crisis, the leaders of the 27 EU member states will also discuss other economic issues, migration, the EU's Southern Neighborhood and Croatia's accession to the EU.

At a meeting with Greek Prime Minister George Papandreou, Herman Van Rompuy, president of the European Council, said he recognized the progress the Greek government had made but still underlined the need for Athens to make further efforts to address current challenges.

"Given the length, magnitude and nature of the required reforms in Greece, national consensus is a prerequisite for success," said Van Rompuy.

Levent Kirval, a professor at Istanbul Technical University, said the summit will mainly deal with the Greek issue and EU economic governance.

"Greece will be rescued, but it will probably be the last and final rescue effort on the part of the EU," Kirval, a specialist on European studies, told China Daily.

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He said Greece has been lucky during the last 30 years by being able to profit from generous EU funding, as its economy has never been very productive.

The Greek economy mainly relies on tourism, shipping and other services, and lacks productive agriculture or industry.

For the EU, Kirval suggested that more integrated economic governance is needed, but should not necessarily be limited to the austerity plans on the table now.

"What Europe really needs is continental-wide Keynesianism," said Kirval.

The British Broadcasting Corp reported that there is little the EU can do until the Greek parliament votes on a new package of tough austerity measures next week.

It also reported that British Prime Minister David Cameron is likely to insist again that the United Kingdom - which did not contribute to the first Greek bailout last year - should not be involved in any second Greek rescue.

Many economists think a Greek default is inevitable sooner or later - and that it will hit confidence in the euro.

The European Council said the heads of state and government were scheduled to start the summit by discussing economic issues at a dinner on Thursday.

They were expected to take stock of the progress achieved on legislative proposals on economic governance, the amendment to the EFSF (European Financial Stability Facility) and on the future ESM (European Stability Mechanism), which are part of the EU's comprehensive response to the sovereign debt crisis.

The leaders are expected to conclude the first European Semester - a check of the budgetary policies and structural reforms undertaken by member states, nominate Mario Draghi as the next president of the European Central Bank and discuss recent developments in the eurozone.

On Friday, the European Council will assess the implementation of migration policies and discuss developments in the south Mediterranean, focusing on Libya, Syria and the Middle East peace process.

The European Council is also expected to call for accession negotiations with Croatia to be concluded by the end of June.

Stefaan Van Kerchove contributed to this story.