Eurozone tries to bolster Greece

A summit declaration in Brussels yesterday committed only the 16 eurozone member states to any bail-out, leaving Prime Minister Gordon Brown free to distance the British taxpayer from the cost.

A Downing Street statement last night welcomed the commitment of the "euro-area" member states to "take determined and co-ordinated action to safeguard financial stability in the euro area as a whole".

Arriving at the talks earlier, Mr Brown was asked whether British taxpayers may have to contribute to a Greek bail-out if support were needed from the International Monetary Fund.

He replied: "There is international support available, as negotiated at the G20 summit, but the discussions at the moment are within the euro-area."

Greece did not seek financial support at yesterday's talks but Greek Prime Minister George Papandreou agreed to reduce his budget deficit by four per cent this year from its current 12.7 per cent of gross domestic product more than four times the three per cent maximum allowed under single currency rules.

In return, single currency countries "will take determined and co-ordinated action, if needed, to safeguard financial stability in the euro area as a whole," said the summit final declaration.

The EU's President Herman Van Rompuy told a Press conference: "We have said we will take action if necessary. Such action is not necessary today."

The hope is that the pledge alone will revive markets and prevent the scale of Greece's public finance problems spreading to other single currency countries already facing difficulties – Spain, Portugal and Ireland.

The immediate market response was a slight fall in the euro's value by about one per cent against the pound and the US dollar, leaving the single currency worth about 87p.

EU finance ministers will meet on Monday, to consider further measures the Greeks should take to cut their country's deficit. Greek recovery efforts will be monitored by the European Commission working with the European Central Bank and "drawing on the expertise of the IMF" yesterday's statement said.

Mr Van Rompuy said the outcome showed European solidarity, but concern remained that the euro's credibility has been rocked by the way Greece has been able to breach single currency stability rules so flagrantly.

Business Secretary Lord Mandelson was one who leapt to the euro's defence, telling BBC Radio 4 that the Greek crisis has done nothing to dampen his enthusiasm for Britain eventually joining the single currency. He described the currency as a "remarkable success".

The leaders of Germany and France sought to damp down speculation damaging the euro.

German Chancellor Angela Merkel said "we stand shoulder-to-shoulder with Greece", but added she wanted reliable information "about what Greece is actually doing".

French President Nicolas Sarkozy said "we wanted to shoulder our responsibility" by offering political support to Greece.

Britain better off out of Greek tragedy: Page 13. EUROZONE leaders are vowing to rescue the Greek economy if necessary – hoping the promise itself will serve to restore confidence in the single currency.