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EU Leaders Confident Greece Bailout Will Succeed

EU Monetary Affairs Commissioner Olli Rehn

EU Monetary Affairs Commissioner Olli Rehn

The head of the European Commission says he is confident an emergency aid package will keep Greece's crippling debt crisis from further threatening the financial health of other EU nations.

Speaking at a press conference in Beijing Friday, Commission President Jose Manuel Barroso said measures to contain the crisis will be in place in the coming days.

Officials say a bailout being discussed with the EU and International Monetary Fund will likely cost about $160 billion, and will require Greece to drastically slash its deficit by 2011.

Greek Prime Minister George Papandreou told parliament Friday the cutbacks are a "patriotic responsibility" that must be done without regard to political cost.

Greek union officials said the proposed deal could cause extreme hardship.

Police fired tear gas on protesters outside of Greece's finance ministry late Thursday as hundreds gathered to rally against the austerity measures.

More protests are planned on Labor Day, which is on Saturday, while unions have called for a general strike on May 5.

Politicians and investors are worried that economic problems could spread if Greece fails to pay back its debt. Those concerns grew earlier this week, when a key credit rating agency, Standard and Poor's, downgraded its credit ratings of Greece, Portugal and Spain.

Greece faces a May 19 deadline for servicing a portion of its debt.

Any Greek bailout will require the approval of other euro zone members, and the plan has met political opposition in Germany.

European officials, including the European Commission's top economic official Ollie Rehn, have been pressing Germany to support the rescue, saying the package is needed to "safeguard financial stability in Europe."

European Central Bank President Jean-Claude Trichet also said the bailout was needed to help give Europe a "strong sense of direction" to guide the economy.

Standard and Poor's Chief Economist David Wyss told the Associated Press Thursday that the biggest threat from the Greek debt crisis is panic among investors.

Wyss said if people fear Greece will default, they will also worry Portugal will default and then "they will panic about everything."

Some information for this report was provided by AP and AFP.