EU President Herman Van Rompuy told a news conference after the summit that Europe was sending Greece a "clear message of solidarity", a line echoed by Germany and France.
"Euro area member states will take determined and coordinated action if needed to safeguard stability in the euro area as a whole," the 27 EU heads of state said in a statement after their meeting.
A deal to provide financial aid to Greece move to stave off a broader crisis in the 16-nation bloc would be unprecedented, riding roughshod through rules forbidding a bailout.
But the rhetorical promises of support were not enough to satisfy financial markets, which are looking for specifics on how Athens may be helped out of its debt and deficit spiral.
Greek debt yields rose and the euro currency fell against the dollar.
The agreement was forged in talks between Van Rompuy, European Commission President José Manuel Barroso, French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank President Jean-Claude Trichet and Greek Prime Minister George Papandreou.
Polish Prime Minister Donald Tusk told reporters earlier that the aid was likely to come in the form of loans. "It could be voluntary loans from member states. That seems to be the best option," Tusk said.
Details to remain secret
Speaking at a joint press conference with German Chancellor Angela Merkel after the summit, French President Nicolas Sarkozy said Europe was committed to showing "solidarity" with Greece but that the details of any rescue plan would not be disclosed for strategic reasons.
"We have affirmed our support to Greece," Sarkozy said, indicating that Athens was committed "to doing more" to cut its deficits and that its efforts "would be monitored on a monthly basis".
"Greece is determined to make the efforts that are being asked. This is the European response."
"As to the terms [of the deal], we will wait to gauge the developments before adjusting them. Let's say there is a strategy - it is the one we have agreed - and there is a tactic in view of events. The strategy is clear and it is this strategy that the markets and stakeholders have to understand".
Echoing Sarkozy, German Chancellor Angela Merkel said “the most important outcome of today is that Greece has said it is ready to commit to the EU’s demands”.
The leaders' statement said Greece had reaffirmed its commitment to reduce its budget deficit by four percentage points this year and that progress on that front would be monitored regularly.
"Greece is a part of the European Union and won't be left on its own, but there are rules and these rules need to be adhered to," Merkel said.
German concerns
A French diplomatic source told EurActiv that EU leaders were still looking at the detail of a potential rescue plan, due to legal concerns in Berlin that the deal could be rejected by the constitutional court in Karlsruhe.
There is no clear procedure under the EU treaties for bailing out a eurozone country and the focus now is on finding a technical arrangement that is legally water-tight, the source said.
Germany's highest court rejected the so-called Hartz IV welfare law on Tuesday (9 February), arguing that social and welfare payments to the long-term unemployed were too low. The ruling may widen Germany's budget deficit, which is already double the EU's limit, at 5.5% of GDP.
Berlin is also insisting that Greece adopts stricter measures than those spelt out in an austerity plan last week, the French source said (EurActiv 03/02/10).
Tough steps
European leaders are keen to prevent Greece's problems from spreading to other highly-indebted or high-deficit members of the euro zone - such as Spain and Portugal - plunging the currency area into a deeper crisis.
But until this week, they have avoided speaking openly about the aid, fearful that might ease pressure on the government in Athens to enact tough austerity measures needed to bring down a deficit that soared to 12.7% of gross domestic product (GDP) last year - more than four times EU limits.
Various options have been under discussion, including Germany buying Greek government bonds via a state-owned bank, direct budget support via the early release of EU structural funds, issuing eurozone bonds or even turning to the IMF.
An EU government source said the aid would draw on the expertise of the European Central Bank and the International Monetary Fund, but would not involve IMF funds.
Greek Prime Minister George Papandreou said the deficit cuts would be delivered.
"We are willing to take all the reforms that are necessary to change the way the public sector is working in Greece," he said. "We have made very serious efforts to convince our partners that we mean business."
(EurActiv with Reuters.)
