ANALYSIS-EU fumbling leaves euro zone seeking credibilit

ANALYSIS-EU fumbling leaves euro zone seeking credibility


* Lack of clarity by EU leaders makes matters worse
* Risk of contagion to Portugal and others now real
* Euro zone and euro facing moment of "kill or cure"

By Luke Baker 28/04/2010

BRUSSELS, April 28 (Reuters) - The European Union's inability to take quick, firm decisions has exacerbated Greece's debt crisis and increased the risk of contagion to other euro zone countries such as Portugal.

Four months of talks and summits have only just brought the EU to a point where it can release emergency funds to Athens -- a degree of indecision that financial markets have exploited and which now threatens Lisbon and possibly others.

The result, analysts say, is a crisis of confidence in the 16 countries that share the euro single currency. Winning that confidence back is going to take time and leadership, and will probably require deep structural changes to several economies.
"The problem here is the recurring inability in the European project to say brutal truths honestly and clearly and act on them in a realistic manner," said Hugo Brady, a senior research fellow at the Centre for European Reform.