Greece 'integral' to the eurozone, say European leader

The leaders of Greece, France and Germany have said that Greece is an "integral" part of the eurozone.

It follows a telephone call between Greek Prime Minister George Papandreou, French President Nicolas Sarkozy and German Chancellor Angela Merkel.

Greece also reiterated that it is determined to meet all the deficit reductions plans it agreed to in exchange for its two bailouts.

Concerns continue that Greece will default on its debt.

The comments are aimed at calming markets that have seen turbulent trading in recent weeks over fears surrounding Greece's finances.

This has also increased speculation that Greece may have to leave the 17-nation single currency region.

Greek government spokesman Elias Mossialos said: "In the face of the extensive rumours of the last few days, it was stressed by all that Greece is an integral part of the eurozone."

In Germany, a spokesman for Ms Merkel said that both she and Mr Sarkozy had stressed that Greece must stick to its deficit-reduction targets.

"This is the precondition for the payment of future tranches of the [bailout] programme," he said.

"The success of Greece's adjustment will strengthen the stability of the eurozone."

Eurobond proposal

The talks between Ms Merkel, Mr Papandreou and Mr Sarkozy came after EU president Jose Manuel Barroso said he would urge the eurozone nations to issue joint bonds as a means to tackle the debt crisis.

Under so-called eurobonds, member states would be able to borrow money collectively.

The idea is that this would strengthen the positions of the more indebted nations such as Greece and Portugal as it would allow them to borrow more cheaply.

However, Germany has repeatedly expressed its opposition to the idea.

Because Germany is the strongest economy in the eurozone, it can attract buyers to its existing government with much lower interest rates, so it has much to lose from eurobonds being introduced.

Also on Wednesday, credit rating agency Moody's downgraded two French banks after reviewing their exposure to Greek debt.

Credit Agricole was cut from Aa1 to Aa2 and Societe Generale from Aa2 to Aa3.

A third bank, BNP Paribas, was kept on review for a possible downgrade.