EU leaders will not be able to avoid the Greek question cropping up during their emergency talks after the European Commission, on 3 February, decided to issue a stern warning to George Papandreou’s Socialist government about the state of its public finances. It is the first time the EU executive has used the power granted to it under the Lisbon Treaty (Article 121) and Greece will now be forced to report almost monthly to the Commission on its deficit-slashing measures.

Greek sources were unable to say what kind of intervention Papandreou will be preparing for the meeting, but it is widely accepted that he will have to give some kind of update. Finance Minister George Papaconstantinou will be quizzed on Greece’s stability and growth plan – which was endorsed by the Commission – when he meets all 26 of his counterparts for the monthly Eurogroup and Ecofin talks, on 15 and 16 February.

Markets rounded on Greek debt following a revelation last October that the Greek Statistical Office had omitted a significant chunk of expenditure on the yearly accounts it sends to Eurostat (as required under the Stability and Growth Pact). The revision of the figures – for 2008 and 2009 – placed Greece at the top of the EU’s excessive deficit table, with a budget shortfall measuring 12.7% of GDP.

While publicly professing confidence in the Greek austerity plan and dismissing talk of EU-sponsored bailouts, leaders – and Papandreou in particular – will be hard pressed to reassure markets that they are doing enough to secure the stability of the single currency. Jitters over Greek debt spilled over to its eurozone partners Portugal and Spain last week; Italy and Ireland are rarely far behind in monetary discussions. European Central Bank President Jean-Claude Trichet counselled all eurozone members to “behave” after a Governing Council meeting, on 4 February, bringing up the spectre of sanctions for disobedient states.

Meanwhile, the European Parliament’s EPP group is pushing for snap plenary talks on Greece, alluding to “the grave situation of the euro and the financial problems of certain member states within the eurozone” in a statement. French deputy Jean-Paul Gauzès said, “In its current situation, what Greece needs more than ever is market credibility. This credibility will allow it to find the necessary financing to get out of the crisis. But Greece is not the only country with problems”.

Greek public finances

Budget deficit 2009: 12.7% of GDP (EU limit 3%)

Government debt 2009: 120.4% of GDP (EU limit 60%)

Borrowing requirements 2010: 53.2 billion euro