AFP - The European Central Bank and Bank of England kept interest rates at record lows on Thursday as financial markets looked for guidance on growing eurozone deficit and debt problems.

The ECB maintained its main lending rate at 1.0 percent while the BoE rate stayed at 0.50 percent.

Markets had widely anticipated the decisions and were far more concerned by debt-ridden Greece and other countries with high public deficits that have pushed the eurozone into its worst-ever crisis.

Ireland, Portugal and Spain are also threatened by big deficits and slumping competitiveness that were exacerbated by the global economic crisis.

"This is the very first test of the single currency bloc," New York University economics professor Nouriel Roubini said, "eventually some countries might exit the monetary union."

ECB President Jean-Claude Trichet terms such speculation "absurd" but the central bank is nonetheless struggling to resolve a situation that some warned of when the eurozone was created 11 years ago.

"The 'free loader' risk actually exists: if one country implements a massive fiscal deficit, the other countries are forced to come to its aid to avoid a default risk that would be very dangerous for the eurozone," Natixis economist Patrick Artus noted.

In theory, eurozone countries cannot expect to be bailed out by others but while ECB officials stress repeatedly that Greece must straighten out its finances on its own, most experts widely expect some sort of arrangement in the end.

International Monetary Fund head Dominique Strauss-Kahn told RTL Radio Thursday: "The eurozone cannot afford not to help Greece in some form or another.

"If we are asked to get involved, then we will do so but I totally understand that the Europeans want to resolve this problem between themselves," he added.

Greece has a public deficit estimated at around 12.7 percent of gross domestic product and debt equal to 113 percent of GDP, far above the respective 3.0 percent and 60 percent limits established for eurozone members.

"It is far from obvious who can come to the rescue and with what resources," UniCredit chief economist Marco Annunziata wrote in a research note.

At his monthly press conference following the ECB rate decision, Trichet will field questions that are sure to focus on soaring deficits and debt.

He could also comment on measures the ECB would take to unwind exceptional support it provided last year to underpin growth as the eurozone fell into its first recession, and on a bank survey that showed some businesses are still finding it hard to get the loans they need to recover.

Although Asia and the United States are on track for growth this year, looking at the eurozone, Natixis economist Cedric Thriller warned: "A new technical recession in the course of 2010 could not yet be ruled out."