Eurozone meet welcomes cuts in Portugal, Ireland, Spain
Leaders of the 17 eurozone countries were expected to pat crisis-hit Portugal, Greece and Ireland on the back for the austerity programmes they have put into action at a meeting in Brussels on Friday. They are meeting to discuss how they can make the single currency more stable and increase its competitiveness.
Economic Affairs Commissioner Olli Rehn welcomed a plan presented by Portugal just hours before the meeting.
Under pressure from its europartners, Lisbon promised cuts in health, social services and the public sector which aim to reduce its public deficit to 4.6 per cent of GDP in 2011.
Brussels has been discussing reducing the interest rates on repayments of the Irish and Greek debt and allowing the countries more time to pay them back.
The meeting is supposed to lay the groundwork for a full EU summit on the single currency later this month.
The 17 countries in the single currency will sign what they're calling a "Pact for the euro", which is supposed to harmonise economic policy.
The pact will mean that member states can cross-check each other's progress and make recommendations each year at international summits.
It aims to raise employment and encourage competitiveness but it will also try to ensure that individual countries’ deficits will not destabilise the eurozone bloc.
Also at issue is the increasingly pressing question of how eurozone countries can bolster the currency's defences.
The summit comes at a worrying time for international finance.
Markets have been destabilised as the Libyan crisis affects oil prices. And the credit rating agency Moody's cut the ratings of Greece and Spain this month, raising fears that the countries will be unable to pay their debts and causing investors to bet against them.
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