Finance ministers failed to heed Greek crisis: Juncker

(BERLIN) - Eurozone finance ministers failed to pay enough attention to Greece's economic crisis, Eurogroup chairman Jean-Claude Juncker said Saturday, calling it "quite a serious error."

He also told the German daily Sueddeutsche Zeitung that "uncontrollable" consequences would result if Greece were to quit the eurozone, and pledged to keep Athens up to the mark in its efforts to reduce its yawning deficit.

Juncker, the prime minister of Luxembourg, said the Eurogroup, the panel of finance ministers whose countries use the single European currency, would monitor "much more intensively and severely" the performance of its members.

"We are not going to let the Greeks alone," he said. "We are going to ask them constantly where they are at in their reform programmes."

Juncker also warned that "a monetary zone cannot last for long if the differences in performance of the various national economies get too great."

If Greece were forced to abandon the euro, "the effects would be like an earthquake, uncontrollable", he said, triggering an "extremely negative" reaction from the markets."

The European Commission said Friday it was preparing new measures to boost coordination among eurozone member countries and supervise their economic policies in light of the Greek debt crisis.

"The critical lesson from this crisis is that we urgently need deeper and broader surveillance of economic policies, including earlier detection and tackling of imbalances, in order to better safeguard the macro-financial stability of the euro area," EU Monetary Affairs Commissioner Olli Rehn said.

"The commission will soon come forward with proposals to further strengthen the coordination and the surveillance of national economic policies within the euro area," he said in a statement.

The measures could form part of a broader package of proposals being drawn up by the EU's executive arm on the 27-nation bloc's mid- and long-term economic strategy.

A pledge Thursday by EU leaders to help Athens battle its debt, while failing to offer any cash, has failed to convince currency markets, with the euro falling to 1.3532 dollars, its lowest level in nearly nine months, on Friday in London.

While other eurozone members, notably Spain, Portugal and Ireland, are struggling under a debt mountain, most fears centre on Greece, which had a deficit of 12.7 percent of output in 2009 and debt of 113 percent.

New figures also showed economic growth in the 16-nation bloc had slowed to a meagre 0.1 percent in the fourth quarter of 2009, data agency Eurostat said.

The figures showed that recovery in Germany, Europe's biggest economy, had stopped, the Italian economy went back into contraction, and in Greece recession deepened to shrink by 0.8 percent.

Greece, the EU, deficits and debt

Informal Meeting of Heads of State or Government