Euro zone crisis 'needs action'

The euro zone needs coordinated action to resolve its debt crisis, EU economics and monetary affairs Commissioner Olli Rehn said today, days after the head of the IMF criticised the region for taking a piecemeal approach.

"We have to take well coordinated action to safeguard stability in the euro area," Mr Rehn told a conference in Athens. "The current situation is not a crisis of the euro. Greece is not the only country facing major challenges."

Bickering among European Union leaders escalated yesterday over a proposal for joint euro zone bonds to tackle the regions' debt problems, with Germany saying it opposed the idea on legal and economic grounds.

International Monetary Fund chief Dominique Strauss-Kahn, who on Tuesday criticised the EU's response to the crisis as slow and, disjointed, said yesterday the situation in Europe remained troubling and the future more uncertain than ever.

Mr Rehn told the conference that the euro area was determined to agree thorough reform to set up a new system of economic governance.

"We will not stop until we have accomplished our mission. We are now in the decade of fundamental reforms," he said. "During the last decade economic divergence increased among member states."

Greek finance minister George Papaconstantinou told the same conference he believed the single currency area would emerge stronger from this crisis.

"I'm convinced that the euro zone will come out of this adventure stronger than ever despite delayed reactions," he said.

Reuters