MercoPress. South Atlantic News Agency

Uninspired EU summit pledges support for Greece, but prepares for “Grexit”

“France and Europe want you to stay in the Euro zone” said president Hollande

European Union leaders pledged support for Greece on Thursday, vowing to keep the debt-wracked country in the Euro zone as officials prepared behind the scenes for a possible doomsday scenario of exit.

After an EU summit dominated by fears of a “Grexit” that went into the early hours of the morning, EU president Herman Van Rompuy told journalists: “We want Greece to remain in the Euro area while respecting its commitments.”

The EU chief hailed the “significant efforts already made by the Greek citizens” but appealed to Athens to continue to implement reforms that he said were the “best guarantee for a more prosperous future in the Euro area”.

European Commission President Jose Manuel Barroso summed up the leaders' view by saying: “The message that we send today is clear: we will stand by Greece while Greece stands by its commitments.”

Nevertheless, diplomats said on the sidelines of the summit that officials had been tasked to make contingency plans in the case of Greece exiting the Euro zone, sending European stocks and the euro sharply down on the markets.

In Athens, a government statement said the finance ministry “categorically denies” such plans.

And Greece's caretaker leader Panayotis Pikrammenos said that German Chancellor Angela Merkel was “surprised and upset” about the issue of Greece's exit from the eurozone being raised.

For his part, French President Francois Hollande said: “I can't say that there has not been work done” on simulating a Greek exit. But if I started to talk publicly about the hypothesis of Greece leaving, that would mean sending a signal to Greece and to the markets”.

“I prefer to address the Greeks and say: France and Europe want you to stay in the Euro zone,” the president said.

Greece's election in June is shaping up to be effectively a referendum on whether the country stays in the Euro, as parties opposed to austerity measures needed for future bailouts gain significantly in the polls.

The radical leftist Syriza party, which wants to tear up Greece's unpopular rescue deal with the European Union and the IMF, came second on May 6 and is expected to emerge in a strong position in the next ballot.

European leaders have warned that if the next government reneges on promised reforms Greece cannot hope to continue drawing international loans, which would likely lead to its exiting the Euro zone.

“There is a democratic process taking place in Greece. Of course, we respect the democratic process. Let's wait for the people of Greece to have their say on June 17,” said Barroso.