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European Union leaders said government measures to stimulate the economy should stay in place until the “recovery is fully secured.”

“Forecasts suggest a weak recovery in 2010, followed by a return to stronger growth in 2011,” heads of the 27-nation EU said in a statement after a summit in Brussels today. “But uncertainties and fragilities remain, while the employment and social situation is expected to deteriorate further in 2010,” according to the statement.

As Europe’s economy emerges from the worst slump in more than 60 years, concerns persist that the recovery remains dependent on government support. A strengthening euro and rising unemployment pose risks to growth.

Once the recovery is in place, governments should rein in their budget deficits, the statement said. Fiscal consolidation should start in 2011 “at the latest” as long as forecasts by the European Commission, the EU’s executive arm, “continue to indicate that the recovery is strengthening and becoming self- sustaining,” the leaders said.

EU leaders also called on Greece to tackle its fiscal crisis on its own, concerned that an offer of emergency aid might fail to calm markets. With Greece heading for a budget deficit of 12.7 percent of gross domestic product this year, the highest in the EU, the government heads voiced confidence in Prime Minister George Papandreou’s belt-tightening plan no fax payday loans.

‘Important Step’

Greece’s draft budget is “one important step in the right direction but more measures are required,” European Commission President Jose Barroso told reporters late yesterday after the first session. “I am fully confident that Greece will be successful.”

Papandreou told reporters today that his government would cut state spending by reducing layers of government.

“There is no possibility of a default for Greece,” Papandreou said. He also said there was no possibility of Greece leaving the euro area.

“We’re not asking for any gifts,” Papandreou said. “We will live up to our obligations.”

In foreign policy, the government heads set a seven-week deadline for Iran to return to talks over its nuclear program or face stiffer sanctions. The leaders told their foreign ministers to consider a U.S.-led push for tighter penalties at a Jan. 25- 26 meeting unless Iran bows to international demands for assurances that it isn’t trying to build nuclear weapons.

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