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Eurozone Announces Emergency Plan To Contain Greek Crisis

Eurogroup Chairman Jean-Claude Juncker: "The whole euro area is under attack..."
Leaders of eurozone countries have announced they will set up an emergency defense plan to prevent Greece's financial crisis from spreading to other countries and further battering their common currency.

They said the plan, which aims to protect the euro from aggressive financial speculation, would be ready by the time markets open on May 10.

Leaders of the 16 countries that use the euro met with the European Central Bank and the European Commission in Brussels to hammer out an antispeculation plan that they hope will prevent traders from putting the euro under the kind of pressure they imposed after the Greek meltdown.

Speaking early today after the summit's end, European Commission President Jose Manuel Barroso said eurozone nations are ready to take whatever steps are needed to protect the stability of the common currency.

"We will do whatever it takes to safeguard financial stability," Barroso said. "Not only of Greece but of all the euro area. What you can see tonight is a eurozone united around its currency, the euro."

Financial traders have continued to sell off the euro despite the adoption of a 110-billion-euro ($147 billion) rescue loan for Greece, pushing the euro down and threatening to provoke other meltdowns in eurozone countries with low economic growth, such as Portugal, Spain, and Ireland.

European stock markets hit a new low this week, with London, Frankfurt, and Paris plunging by more than 4 percent Friday.

'Exceptional Solutions'

Eurozone leaders, who have been accused of deepening Europe's financial woes with a lack of action, admitted they face an exceptional situation that requires "exceptional solutions."

Luxembourg's Prime Minister Jean-Claude Juncker, who is chairman of the EU's "eurogroup" of countries that have adopted the euro -- said the eurozone is facing a "global attack" by markets and urgently needs to impose antispeculation measures.

"We are considering that the whole euro area is under attack, and we have to formulate from now until Sunday night a coherent answer of the whole euro area and of the whole European Union to these attacks against the euro area, which are not justified," Juncker said.

All 27 European finance ministers will hold emergency talks on May 9 to work out the plan's details.

Beyond immediate measures to protect the euro, leaders also agreed to accelerate budget cuts, tighten EU budget rules, and come up with more biting sanctions for countries that overspend.

German Chancellor Angela Merkel, who faces stiff domestic opposition to the Greek bailout, suggested changes to the 1992 treaty that laid the groundwork for the shared currency.

written by Claire Bigg, with agency reports
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