Greece's request for aid from the European Union (EU) and International Monetary Fund (IMF) on Friday is an unprecedented step for the EU which many economists hope will herald the start of closer economic and political cooperation in Europe
But just securing agreement on the aid has revealed cracks in EU unity and although reform of the euro zone now seems inevitable, there is no guarantee member states will agree on the far-reaching changes that many economists say are needed.
"The crisis is going to prove a turning point because what is happening is an acceleration of trends that were already there (towards stronger cooperation)," said Andre Sapir, professor of economics at Universite Libre de Bruxelles.
But he added: "We have a serious problem of leadership in the European Union. The problems are very big but we don't have the leaders to deal with them."
Preventing a Greek default is an important test for the 16 countries that use the euro as they try to maintain confidence in the single currency and prevent similar problems spreading to other members of the group.
The crisis has forced the 27-country EU to consider ways to deepen political and economic coordination and take actions that seemed unlikely just weeks ago, such as asking the International Monetary Fund for help and rescuing a member of the euro zone.
The EU's commitment to carrying out reforms will soon be tested as the European Commission sets out its plans to avoid any repeat of the Greek debt crisis.
The EU executive will unveil proposals on May 12 to give more teeth to repeatedly breached rules on budget discipline, increase economic surveillance across the bloc and create what it calls a permanent crisis-resolution mechanism.
"The latest developments in the European economic area, not least around Greece, have shown a pressing ... need to reinforce policy coordination in the euro area and in the European Union as well," European Economic and Monetary Affairs Commissioner Olli Rehn told a news conference on April 14.
The backing of
Chancellor Angela Merkel and President Nicolas Sarkozy agreed on the need for closer economic cooperation at talks on Feb. 4 but have different visions of the euro zone and it is far from certain their views will be reconciled.
An agreement between
But the choice of words in a statement outlining the agreement highlighted their lingering differences over the important issue of economic governance -- central economic planning which is resisted by
The French text referred to "economic government" and the German text referred to "steering"
"Is there now going to be a big breakthrough on economic governance? If you ask in
READ MORE ON Greece
ADS BY GOOGLE
video of the day
Nifty to fall below 7500 if Q3 disappoints; GST key: Kumar