The 16 countries that use the euro are set to offer Greece a credit line to make sure the country does not default on its debts, Austrian Chancellor Werner Faymann said Wednesday ahead of a European Union summit, dpa reported.
Greece's financing problems have caused havoc for the euro on money markets, but EU member states have so far been divided over how to react and whether to offer an emergency bail-out. The issue had been expected to dominate Thursday's summit.
"It amounts to credit lines," Faymann told journalists at a pre-summit meeting with EU socialist leaders.
"It's not a question of money for nothing or of subsidies: it's about loans at interest that we make available to a country to help it as fast as possible, so that it doesn't lead to irritations on the financial markets here," Faymann said.
The credit line could be set up with the help of the International Monetary Fund (IMF), he said.
EU leaders at Thursday's summit are to discuss the idea with the head of the European Central Bank, Jean-Claude Trichet, and the president of the eurogroup, Jean-Claude Juncker, over lunch before finalizing the decision, Faymann said.
The details have yet to be decided, but the important thing is to stabilize Greece quickly before its woes lead to more difficult borrowing terms for other euro states, such as Spain and Portugal, he said.
Greece's financial problems have caused serious problems for the euro in recent weeks, with markets speculating that Spain and Portugal - both euro members with substantial deficits - could face similar financing difficulties.
"We must support Greece. The EU and the eurogroup (the 16 countries including France, Germany and Spain that use the euro) will take it on," Spanish Prime Minister Jose Luis Rodriguez Zapatero said at the pre-summit meeting in Brussels.
Spain currently holds the EU's rotating presidency, but the bloc's summits are now to be chaired by the its new full-time president, Herman Van Rompuy.
Van Rompuy called for Thursday's meeting to discuss the EU's long-term economic strategy, but the Greek issue is expected to dominate the agenda.
"We need a common answer. The EU must prove its ability to act," Zapatero told the German Press Agency dpa.
Ahead of the summit, EU member states gave mixed signals on how they wanted the bloc to react to Greece's woes.
Some members called for Greece to turn to the IMF, many called for a European bail-out, and others said that there should be no talk of paying Athens.
On Wednesday, eurogroup finance ministers held an unprecedented video conference to discuss the Greek crisis.
Diplomatic sources in Brussels said that the leaders of France and Germany, Nicolas Sarkozy and Angela Merkel, were expected to make an announcement on Thursday. Others said that the EU's 27 leaders were set to make a joint statement.
The summit had been scheduled to start at 10am local time (0900 GMT) but was put back by two hours because of snow.
Eurozone to offer Greece credit line, Austrian leader says
