Page last updated at 21:43 GMT, Friday, 19 March 2010

Greece debt solution needed now, says EC

Protesters in Athens
Austerity measures have proved deeply unpopular in Greece

The European Commission (EC) has urged eurozone governments to approve a package of loans to help Greece resolve its debt crisis.

EC President Jose Manuel Barroso said action was needed now to help Greece reduce its high levels of debt.

He spoke of a "system of co-ordinated bilateral loans" from European partners as the best way forward.

Greece has announced austerity measures, but eurozone partners have failed to agree on how best to help.

Germany in particular has been reluctant to come to Greece's aid.

Greece has not asked for any cash from European governments.

Spending cuts

"I urge all member states to agree as soon as possible on this [system of loans]. We cannot prolong any further the current situation," Mr Barroso said.

He made his appeal ahead of a summit of European leaders in Brussels next week.

Greece has one of the highest budget deficits in Europe, which is four times the ceiling set by European Union budget rules.

By spring, Greece must refinance a large chunk of that debt or risk defaulting on its loans, which would be a huge blow to the whole credibility of the eurozone economy.

The Greek government has announced a series of spending cuts and tax rises to reduce its deficit by billions of euros, but doubts remain about whether these will be enough.

Global stock markets have been affected by the crisis, and the euro has weakened because of it.

The cuts have proved deeply unpopular in Greece and have provoked a number of protests.

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