The euro is facing a testing few months amid deepening concerns about Greece's battle to contain its financial crisis and the threat that lengthening job queues could undercut Europe's recovery from its deepest recession in a generation, according to dpa. Europe's common currency sunk further below the key 1.40-dollar mark Friday, with rising unemployment across the 16-member eurozone helping to reinforce market anxieties about the threat posed to several euro member states of ballooning debt and deficit levels. "The Greek story is overriding everything," said Rainer Guntermann, economist with Germany's Commerzbank. "It is perceived to be the eurozone's weak link. Concerns about Athens not being able to service its debt as well as the state of finances in eurozone nations such as Portugal and Spain have moved to centre stage at the annual World Economic Forum in Davos. This has also helped to spark worries about Italy, with the eurozone's third biggest economy seen as facing a further erosion of its international competitiveness in the wake of last year's dramatic contraction in economic growth. Both Spanish Prime Minister Jose Luis Rodriguez Zapatero and Greek Prime Minister George Papandreou used the Davos gathering to lash out at markets amid speculation that Greece could even be forced out of the eurozone. According to Papandreou, several eurozone nations are "being targeted particularly by (groups) with ulterior motives or agendas," adding that "often countries are being used as (the) weak link" of the currency bloc. At the same time, the Spanish leader insisted: "Nobody is going to leaving the eurozone, in fact more countries are going to be joining the euro in the future." But while the European Union's official stance is that Athens has to sort out its financial difficulties, diplomats in Brussels said leading eurozone states are discussing whether they might be forced to bail out Greece. Nevertheless, the scale of the financial crisis threatening Greece resulted in both Spain and Portugal unveiling this week ambitious budget plans aimed at cutting back their public deficits, which have also been hit by what has been dubbed the Great Recession. But while the world's political and business establishment have been the Swiss Alpine resort hearing attempts by European leaders to allay fears about mounting debt problems, confidence in Greece's chances of grappling with its crisis has taken a hammering in the markets. In particular, this has left Greek bonds at the mercy of market rumours, with premiums soaring in recent days and talk about how Europe might deal with the financial woes that have engulfed Athens. The renewed market worries about Greece are likely to mean eurozone member states' deficits will again dominate next Thursday's European Central Bank meeting. But analysts are expecting the ECB to retain its hard line on Greece with the bank's Frankfurt-based chief, Jean-Claude Trichet ruling out at a press conference earlier this month any special help for Greece. "No government, no state can expect any special treatment" in dealing with a crisis in their state finances, Trichet said.
