From left, Chancellor Angela Merkel of Germany, Prime Minister George Papandreou of Greece and President Nicolas Sarkozy of France left the European Union Council building after a meeting in Brussels on Thursday.
BRUSSELS — European leaders, facing a crucial test for the credibility of their common currency, promised “determined and coordinated action” to safeguard the euro as they sought to persuade jittery bond market investors that Greece would not be allowed to default on its government debt.
Herman Van Rompuy, president of the European Council, also said that the European Union would monitor closely Greece’s pledges to reduce its alarming budget deficit, and would propose measures for Athens drawing on the expertise of the International Monetary Fund.
Further work by finance ministers on assistance for Greece, and the conditions that would be attached to any aid, will take place early next week. But the initial reaction in the markets was disappointment at the lack of detail in the announcement. The euro dropped 0.8 percent to $1.3630.
Mr. Van Rompuy, who insisted that the Greek government “has not requested any financial support,” issued his statement after meeting leaders of Greece, France and Germany in Brussels before the meeting of all 27 European Union national leaders. German Chancellor Angela Merkel said before the announcement: “Greece won’t be left alone but there are rules and these rules must be adhered to. On this basis we will agree on a statement.”
No details were released as the leaders hurried into the summit meeting, but Werner Faymann, Austria’s chancellor, said in an earlier interview with the Austrian broadcaster ORF that the plan would call for the nations of the euro zone to finance any loan to Greece while drawing on the expertise of the International Monetary Fund to implement it and impose conditions on the government in Athens.
“It is important to have solidarity,” Mr. Faymann said in the interview Wednesday night. “It is a situation where the countries of the euro zone can work together — can find solutions together also with the International Monetary Fund.”
Ministers from the euro zone, and then those from the entire 27 member states, will discuss contingency plans for aid to Greece — if required — on Monday and Tuesday, said one official speaking on condition of anonymity. The monetary fund would be used for technical support rather than any financing, which could come from the euro zone. Another possibility might be to advance European Union subsidies to Greece.
But investors on Thursday were left confused as to whether European leaders were about to produce details of a bailout mechanism, or were simply issuing a declaration of political backing for Greece.
Thursday’s meeting began two hours late, ostensibly because of the cold weather in Brussels. The delay, however, gave additional time for the Greek prime minister, George Papandreou, to talk to his French and German counterparts and to Mr. Van Rompuy.
Before that meeting Mr. Van Rompuy had held discussions with Jean-Claude Juncker, chairman of the group of euro zone finance ministers, and José Manuel Barroso, president of the European Commission. Mr. Van Rompuy’s statement, when it came, had to be repeated because of problems with the microphone as he and Mr. Barroso stood in the cold outside the Bibliothèque Solvay in Brussels.
European officials have faced great urgency to devise a bailout for Greece. Fears that the Athens government might default have helped cause a recent slump in financial markets worldwide.
A phalanx of European leaders put on a unified show of support ahead of the summit meeting, which brought together the heads of all European Union governments and the finance ministers of the 16 countries that use the euro. Together with the president of the European Central Bank, Jean-Claude Trichet, the finance officials agreed Wednesday that they could no longer allow uncertainty about the future of Greece — and the euro zone — to disturb global investors.
But still unclear was how any loans to Greece would be structured and who would stand behind any pledges to buy Greek government bonds should the need arise. Investors like the concept of having one or several creditworthy nations, like Germany, guaranteeing the debts of a poorer nation, although such a move would be largely without precedent.
Germany and France are taking the lead on any emergency solution, but in seeking a consensus among the rest of the countries of the European Union, they found themselves being forced to consider a role for the monetary fund — which often provides financial aid to emerging markets. While Britain and Sweden had talked about enlisting the monetary fund directly, turning to the organization for direct support was considered an undesirable option by the euro zone countries.
At the same time, officials are worried about the “moral hazard” of any Europe-backed solution for Greece: If one country is bailed out by the others, investors would come to expect a similar response should other weak economies that use the euro, including Portugal and Spain, fall into serious trouble.
There are also questions about how to apply any commitments so that the weaker governments would be pressured to deliver painful economic overhauls.
The effort to support Greece came as Greek citizens demonstrated on Wednesday to protest austerity measures announced by the government, which many market participants think are far from adequate.
“At this junction they will have to support Greece,” Simon Tilford, chief economist at the Center for European Reform, said of Europe’s politicians. “If you have encouraged the markets to believe that support is forthcoming and then it is not, we will see a backlash” in financial markets.
Though Mr. Tilford said the markets would ideally like to see some form of guarantee extended to Greek loans, he added that this would probably be too much for the government in Berlin. That is one reason why the European leaders began to focus on the idea of a loan facility extended on the condition that changes supervised by the I.M.F. were undertaken by the government in Athens. It would also need to apply to other countries facing similar ills.
The meeting Thursday was called by Mr. Van Rompuy to try to draw up a longer-term economic strategy for the European Union to modernize its economy by 2020, an agenda that has been overshadowed by the euro zone debt crisis.
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