NICOSIA, Sept. 15 (Xinhua) -- European Finance ministers taking part in a meeting in Cyprus are optimistic on the revival of European economy and the ease of debt crisis in Greece and other EU countries.
EU Commissioner for Financial Affairs Olli Rehn told a press conference on Friday at the end of the first meeting of a two-day session of the Economic and Financial Affairs Council (ECOFIN) in Cyprus that new economic projections by the commission due in November will show a return to growth on a European level in 2013.
However, Rehn said that growth will be exposed to dangers.
"Eurozone is moving to the right direction but decisive action by member countries of the eurozone as a whole and each one member separately is needed so that further balancing of the zone is facilitated," Rehn said.
"There is a common understanding that despite important steps taken to face the debt crisis, weaknesses of the financial sector and market imbalances continue to slow down economic growth and create dangers for the stability of the European Union, especially the eurozone," Cyprus Finance Minister Vasos Shiarly said.
Shiarly also said that it is not late for Europe to take additional measures to safeguard the survival of the economic and financial union.
Eurozone Finance Ministers announced that the European Stability Mechanism will be launched on Oct. 6 at a Finance Ministers meeting after the go-ahead given by the German Constitutional Court.
International Monetary Fund Director Christine Lagarde said very important steps taken by the eurozone to face the debt crisis are fully supported by the IMF.
"I hope the current fortuitous moment which is clearly positive will continue and will strengthen and consolidate the positive results which we have witnessed in the markets," Lagarde said.
Meanwhile, it seems that eurozone finance ministers have prepared the way for a new deal with Greece when they praised Athens for progress in implementing the terms of its bailout agreement.
"We have been encouraged by the progress achieved by the Greek government and we have high hopes that the target will be reached," said Eurgroup President Jean-Claude Juncker at a press conference after the meeting on Friday.
This was echoed by Lagarde who said that "it seems to us quite clear that Greece has already produced a huge effort, but it will have to continue to do so."
The Greek government is locked in tough negotiations with technocrats from the troika -- the European Commission, the European Central Bank and the International Monetary Fund -- on a revision of its 130 billion euro (about 170 billion U.S. dollars) bailout program with a view of obtaining the release of a 31 billion tranche in October.
Greece is putting up a big fight to secure a lengthening of the time span in which to implement tough terms of the bailout program.
Greek Finance Minister Ioannis Stournaras said after the Eurogroup session that the time factor seemed to be on the table, but he did not envisage an agreement before the second half of October.
"We are on the right track, though we do not agree on all aspects. We will try to finish everything by the end of October," Stournaras said.
Juncker also said that a report on progress in the troika negotiations with Greece is expected within the first week of October but a Eurogroup final decision will not be in place before the second half of the month.
Juncker was categorical when in answer to a question, saying that Greece will not quit the eurozone.
Much of Friday's Eurogroup ministerial session was taken up by discussion on Spain, which is reported to be putting up strong opposition to pressure to apply for a full bailout.
Juncker said Spanish Finance Minister Luis de Guindos set out his country's program of action to meet its fiscal targets. He said the program will be ready to be put before the Eurogroup by the end of September and will be implemented by November.
Part of the discussions was taken up by the situation in Ireland and Portugal, both of which seemed to have reported progress on implementing austerity measures. Juncker said he expected Portugal to return to the markets next year and also praised Ireland as proof that bailout programs are giving results.
Host country Cyprus, the fifth Eurogroup country to apply for bailout, informed other Eurozone countries on its efforts to draw up an austerity program in exchange for financial support by the European Union and the International Monetary Fund to help it recapitalize its banking system, battered by its exposure to the Greek debt.
Cyprus government is insisting that the need to recapitalize its two major banks is the only reason it has applied for bailout, but EU Commission officials have stressed that its economy needs to be radically restructured.
Cypriot Finance Minister Vassos Siarly, who presided over the meeting, briefed his colleagues on the state of negotiations with the troika technocrats.
Both Juncker and Lagarde urged Cyprus to take a clear stance on the bailout issue.
"We called on Cyprus to soon clarify its intentions in connection with continuing and concluding negotiations on a possible bailout program," Juncker said.
Cyprus may only need between 10 to 15 billion euros to meet its immediate financial obligations, a small amount for European institutions and the IMF, but a huge burden on the island's 17 billion euro GDP.
ECOFIN Ministers concluding their session on Saturday are expected to discuss setting up a so called Bank Union leading to the establishment of an effective bank control mechanism.
"We need a Bank Union for the stability and integrity of the eurozone," European Commissioner for Internal Market and Services Michel Barnier said.