**The question of how to contain Greece’s debt problems and ease pressure on the euro will weigh heavily on EU leaders when they meet in Brussels later.**The 27 leaders are under pressure to give a clear signal to financial markets that Greece’s budget crisis will not destabilise the euro.
EU rules prevent eurozone members from jointly bailing out Greece. But bilateral help might be forthcoming.
It is the first big test for European Council President Herman Van Rompuy.
He wants the summit to focus on a new strategy for jobs and growth - a blueprint for the next 10 years.
Eurozone contagion fears
The other main agenda items are climate change and help for earthquake-devastated Haiti.
“We have not asked for help, we have said that we just want you to support our own will”
**George Papandreou
Greek Prime Minister **
Greek PM pledges to slash deficit
Mr Van Rompuy’s priorities on climate change include “changing the dynamics of the negotiating process”, to put the EU back in the driving seat after the disappointment of Copenhagen in December.
In Copenhagen the EU failed to get binding global targets on greenhouse gas emissions, in what was widely seen as a big diplomatic setback.
Mr Van Rompuy has chosen a quiet old wood-panelled library, Bibliotheque Solvay, as the secluded setting for his first summit as EU president. It is just a short walk from the usual EU venue - the modern Justus Lipsius building, which houses hundreds of journalists and delegation officials.
Greece is not even mentioned in Mr Van Rompuy’s invitation letter to the EU leaders, but correspondents say it is bound to figure prominently in the day-long discussions.
Other eurozone countries with big deficits, such as Portugal and Spain, are seen as vulnerable if Greece’s budget crisis is not tackled resolutely.
The talks are all the more urgent coming just hours after a public sector strike brought many services to a standstill in Greece.
The government’s decision to freeze public sector salaries and raise the retirement age are among the austerity measures that have angered Greek trade unions.
Market sensitivities
Greece’s deficit is, at 12.7%, more than four times higher than eurozone rules allow.
Its debt is about 300bn euros ($419bn; £259bn), and the government estimates it will need to borrow about 53bn euros this year to cover budget shortfalls.
The markets remain sceptical that Greece will be able to pay its debts, and speculation is rife that the EU is preparing to bail the country out.
Analysts say that powerful eurozone members such as Germany may be able to help by buying Greek government debt or by providing loan guarantees.
In addition, the European Commission may decide to disburse regional aid to Greece earlier than planned.
But EU leaders appear reluctant to call on the International Monetary Fund to shore up the Greek economy. That would be a big blow to pride in the single currency.
After talks with French President Nicolas Sarkozy in Paris on Wednesday, Greek Prime Minister George Papandreou said his government would do whatever it took to cut its deficit.
“We have not asked for help,” he said. “We have said that we just want you to support our own will, our country’s credibility in implementing this programme.”
The BBC’s economics correspondent Andrew Walker says a default by any of the high-deficit eurozone countries would hit banks in Europe which hold government debt.
The risk is that the contagion could hurt European exports and even trigger a rapid decline in the euro’s value, if international investors took fright and tried to shift their assets into other currencies, our correspondent says.
So far the decline of the euro has been substantial - about 9% since early December - but not disorderly, he says.
The European Commission is working on the blueprint for the EU’s new economic strategy, called Europe 2020, which is expected by early March.
It will replace the Lisbon Strategy, launched in 2000, which became a victim of the global financial crisis and of fiscal rule-breaking by EU governments.
Mr Van Rompuy is reported to favour tighter EU coordination of economic policy and enhanced EU surveillance of member states’ budgets.