European leaders hold an emergency summit in Brussels that could break the deadlock around Greece’s debt crisis.
Greece’s Prime Minister Alexis Tsipras said he hoped Greece would “return to growth within the eurozone”.
European finance ministers have said there is still no basis for making a decision for aid for Greece on June 22.
On June 21, Alexis Tsipras set out new proposals to try to prevent a default on a €1.6 billion IMF loan.
But he has ruled out pension cuts, higher power rates, and an excessive budget surplus.
Greece must repay the loan by the end of June or risk crashing out of the eurozone and possibly the EU.
Talks have been in deadlock for five months. The European Commission, the IMF and the European Central Bank (ECB) are unwilling to unlock the final €7.2 billion tranche of bailout funds until Greece agrees to economic reforms.
European leaders at the EU summit in Brussels say distrust of the US over spying could harm the fight against terrorism.
A statement agreed by the leaders says that “a lack of trust could prejudice” intelligence-gathering co-operation.
France and Germany are pushing for talks with the US to find a new “understanding” by the year’s end.
A number of allegations against US intelligence agents have surfaced this week, including the bugging of German Chancellor Angela Merkel’s phone.
In addition there have been claims that the US National Security Agency (NSA) monitored millions of French telephone calls.
On Thursday, the UK’s Guardian newspaper also reported that it had obtained a confidential memo from the NSA suggesting it had monitored the phones of 35 world leaders.
The latest revelations have been sourced to Edward Snowden, the former intelligence contractor who fled the country earlier this year and is now in Russia.
They have overshadowed other issues at the EU summit in Brussels, including the Mediterranean migration problem, which frames the agenda of Friday’s talks.
Italian authorities said they had intercepted some 800 migrants trying to cross the Mediterranean as the EU leaders prepared to meet.
The statement of heads of state or government, released on Friday, reflects the EU leaders’ conclusions following their talks on Thursday.
It says the recent intelligence issues had raised “deep concerns” among European citizens.
The statement says the leaders “underlined the close relationship between Europe and the USA and the value of that partnership”.
It continues: “[The leaders] stressed that intelligence-gathering is a vital element in the fight against terrorism.”
European leaders at the EU summit in Brussels say distrust of the US over spying could harm the fight against terrorism
And it went on: “A lack of trust could prejudice the necessary cooperation in the field of intelligence-gathering.”
Belgian PM Elio di Rupo said: “The objective must remain the same – to fight against terrorism but also respect privacy.
“Everyone can understand the need for exceptional measures given the danger of terrorism… but we are not in the position where we should spy on each other.”
Talks among the EU leaders had continued late into Thursday night.
Speaking afterwards, Angela Merkel said: “We need trust among allies and partners. Such trust now has to be built anew.
“The United States of America and Europe face common challenges. We are allies. But such an alliance can only be built on trust. That’s why I repeat again: spying among friends, that cannot be.”
Germany and France said they were proposing talks with the US to settle the row by the end of the year.
The leaders’ statement said: “The heads of state or government took note of the intention of France and Germany to seek bilateral talks with the USA with the aim of finding before the end of the year an understanding on mutual relations in that field.
“They noted that other EU countries are welcome to join this initiative.”
French President Francois Hollande said on Friday: “What is at stake is preserving our relations with the United States.”
EU President Herman Van Rompuy accepted the UK had “a special relationship” with the US, but said Britain was “completely on board with this text”.
UK PM David Cameron has yet to comment.
But a number of other leaders have indicated their support for the French and German position.
Finnish PM Jyrki Katainen said: “We have to talk together with the Americans, and try to find some sort of code of conduct [on] how to cooperate on this kind of issue in the future.”
Swedish PM Fredrik Reinfeldt said it was “completely unacceptable” to eavesdrop on the leader of an ally, a view echoed by Italian PM Enrico Letta, who added: “We want the truth.”
Other leaders signaled the need to move on.
Lithuanian President Dalia Grybauskaite said: “The main thing is that we look to the future. The trans-Atlantic partnership was, and is, important.”
Angela Merkel had raised her concerns with President Barack Obama in a call on Wednesday.
White House spokesman Jay Carney later said President Obama had assured Chancellor Angela Merkel that her phone was not being listened to now and would not be in the future.
However, his statement left open the question of whether calls had been listened to in the past.
The fresh allegations of US spying threaten to overshadow talks at an EU summit due to begin in Brussels.
The EU summit comes a day after German Chancellor Angela Merkel called President Barack Obama over claims that the US had monitored her mobile phone.
France’s President Francois Hollande is pressing for the issue to be put on the agenda following reports that millions of French calls had been monitored.
EU leaders will also discuss Europe’s economic recovery and immigration.
Some EU leaders are likely to want to use the summit to demand further clarification from Washington over the activities of its National Security Agency (NSA) in Europe.
The US is being called to account by its allies over allegations of spying based on material said to originate from NSA leaker Edward Snowden.
Angela Merkel says she wants US officials to clarify the extent of their surveillance in Germany.
Her spokesman said the German leader “views such practices… as completely unacceptable”.
Angela Merkel demanded an “immediate and comprehensive explanation”, said Steffen Seibert in a statement.
“Among close friends and partners, as the Federal Republic of Germany and the US have been for decades, there should be no such monitoring of the communications of a head of government,” the statement added.
A front-page commentary in Thursday’s Suddeutscher Zeitung – one of Germany’s most respected papers – refers to the “biggest affront”.
It says an attack on Angela Merkel’s mobile phone would be an attack on “her political heart”.
The White House said President Barack Obama had told Angela Merkel that the US was not monitoring her calls and would not in the future.
The EU summit comes a day after German Chancellor Angela Merkel called President Barack Obama over claims that the US had monitored her mobile phone
However, it left open the question of whether calls had been listened to in the past.
State-monitoring of phone calls has a particular resonance in Germany – Angela Merkel herself grew up in East Germany, where phone-tapping was pervasive.
In July, German media carried comments by Edward Snowden suggesting the NSA worked closely with Germany and other Western states on a “no questions asked” basis, monitoring Germans’ internet traffic, emails and phone calls.
“They [the NSA] are in bed with the Germans, just like with most other Western states,” Edward Snowden was quoted as saying by Der Spiegel magazine.
However, Angela Merkel denied any knowledge of the collaboration.
In June, Barack Obama assured Angela Merkel that German citizens were not being routinely spied upon. At the time, she was criticized by her political opponents for not being more skeptical.
Meanwhile, a major focus of the summit will be to boost the digital economy – seen as vital for growth.
With markets becalmed, Spain coming out of recession and Ireland soon to exit its bailout programme, there are signs of progress for Europe’s leaders to celebrate, says our correspondent.
One of the key initiatives of the European Commission is its Digital Agenda for Europe, which it says “aims to reboot Europe’s economy and help Europe’s citizens and businesses to get the most out of digital technologies”.
Council officials say investment in the digital economy is vital to boost growth. They want to address market fragmentation and a perceived shortage in IT skills.
They may also discuss telecoms reform, data protection and a cap on credit card payments.
The European Commission – which makes the rules – has recognized that it may have gone too far in some places.
President Jose Manuel Barroso says he wants the EU to be “big on big things and smaller on smaller things”.
He says the Commission has cut more than 5,000 legal acts in the past five years and wants to do more.
On Friday the leaders will discuss relations with central European countries, ahead of a November summit at which new agreements will be signed.
Migration will also be discussed, following the loss of hundreds of lives among migrants trying to reach Europe from Africa and the Middle East.
The commission has called on EU countries to offer “additional and urgent contributions” to prevent further tragedies at sea.
It wants greater resources to survey and patrol sea routes, but also a more co-ordinated approach to dealing with migrants.
Countries on the Mediterranean coast deal with sudden and unmanageable mass arrivals, but the countries which approve most asylum requests are Germany, France and Sweden.
The commission wants a more even resettlement of refugees.
EU sources say the leaders are likely to promise improved co-operation, but not more money or resources. They say they first want a new surveillance effort, Eurosur, to come into force, to see what effect it has.
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