Chinese central banker says Greece crisis 'tip of iceberg'

(HONG KONG) - One of China's top central bankers on Thursday warned that Greece's debt crisis was just the "tip of the iceberg," and raised the spectre of a fiscal implosion spreading across Europe.

"Greece is only one case, but it's only a tip of the iceberg," People's Bank of China Deputy Governor Zhu Min told an investment forum in Hong Kong.

"I don't think Greece will go bankrupt because it's still relatively small, but we don't see decisive action that tells the market, 'We can solve it, we can close it,' so the market is very volatile."

Zhu added that the "main concern today obviously is Spain and Italy," according to Dow Jones Newswires.

On Wednesday, Fitch Ratings downgraded Portugal, which has wrestled with its own weak public finances.

Zhu's comments came hours before a European Union summit kicked off with all eyes on the Greek fiscal crisis, which helped pound the common currency's value to a 10-month low of 1.3283 dollars in Asian trade on Thursday.

The two-day EU summit starts against a backdrop of bickering over a key eurozone problem -- what to do when EU member states break the basic rules on public finances.

Germany is holding out for Greece to seek aid from the International Monetary Fund but others, including the European Central Bank, think any support must come from Europe to preserve the credibility of the euro and the eurozone.