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EU leaders move to shore up euro

EU leaders will brush aside fears of another eurozone meltdown and approve a package of economic monitoring and surveillance measures designed to shore up the single currency.

The move should herald the revival of Europe's collective economic fortunes, after costly bail-outs for Greece and Ireland and a huge dent in the euro's credibility.

But an eve-of-summit crisis in Portugal overshadowed the Brussels talks and raised the spectre of yet another massive bail-out guarantee - with the UK facing a potential exposure of more than £3 billion.

On Friday's second day of the summit EU leaders are due to endorse a declaration backing "a comprehensive package of measures to respond to the (economic) crisis, preserve financial stability and lay the ground for smart, sustainable, socially inclusive and job-creating growth".

The draft text adds: "This will strengthen the economic governance and competitiveness of the euro area and of the European Union."

But the upbeat wording jarred with the presence at the summit of Portuguese "caretaker" prime minister Jose Socrates, who quit on Wednesday after failing to win parliamentary support for an austerity package to tackle the country's economic problems.

That triggered speculation that Portugal will be next to come cap-in-hand to Brussels, risking a new round of financial market assaults on the vulnerable single currency and undermining the summit's talk of a sustainable economic recovery strategy.

Prime Minister David Cameron refused to respond to suggestions that the UK may have to pledge billions to any emergency funding for Lisbon, saying: "It's not right to comment and speculate on another country's finances, and I'm not going to do that."

European Commission President Jose Manuel Barroso insisted: "We have not discussed this possibility. The Prime Minister of Portugal explained the vote in the Portuguese Parliament and he made it clear that in the most likely case that there will be soon elections in Portugal.

"Whatever will be the next government, all (existing) commitments in terms of fiscal targets will be respected. This is very important regarding confidence in Portugal."


From Belfast Telegraph