* Greek minister says new steps may be announced soon
* EU economic commissioner Rehn to visit Athens on Monday
* Germany"s Merkel says no decision on aid has been taken
* But French minister says options being considered
(Adds Merkel saying no decision on aid, Rehn"s schedule ofmeetings in Athens)
By Renee Maltezou
ATHENS, Feb 28 (Reuters) - Greece may soon announce new steps to cut its budget deficit, a government minister said onSunday, amid signs that Athens might be nearing a deal withEuropean Union governments to ease the Greek debt crisis.
Economy Minister Louka Katseli said Prime Minister GeorgePapandreou would review Greece"s fiscal plans, after an EUmission to Athens last week decided that the country"s austeritymeasures were not strong enough to reassure financial markets.
"If more measures are to be taken, they will be announcedsoon," Katseli told state television. "The red line for everyonein this government is that the measures are effective, bringingadditional revenues, and that they are socially just."
EU Economic Affairs Commissioner Olli Rehn was due to visitAthens on Monday for talks with Greek officials about thecrisis, which has rocked Europe"s debt market and underminedinvestors" confidence in the common euro currency.
The market has been speculating that Rehn"s visit, ifsuccessful, could move EU governments closer to announcing someform of emergency aid for Greece in exchange for a pledge byAthens to take fresh budget steps.
A German member of the European Parliament, JorgoChatzimarkakis, said on Saturday that Germany, France and theNetherlands would buy Greek bonds in the deal, using state-runbanks such as Germany"s KfW and France"s Caisse des Depots.
It was unclear how Chatzimarkakis, who is not a high-profilepolitician in Germany, might know of such a plan. His commentsechoed a similar report on Saturday in major Greek newspaper TaNea, which quoted unnamed sources.
GERMANS, DUTCH SAY NO DECISION MADE
German Chancellor Angela Merkel said in a televisioninterview on Sunday that she was grateful the Greek governmentwas planning "very courageous" steps to curb its budget deficit.
She repeated comments, first made last week, that the eurowas in its toughest period since its launch in 1999 -- possiblyan effort to prepare German public opinion, which is stronglyagainst aiding Greece, for intervention by Berlin in the crisis.
But Merkel stressed no decision had been taken on financialassistance to Greece, and that Berlin continued to expect Athensto take whatever steps were necessary to resolve its problems.
"There have been absolutely no other decisions taken. Iwould like to say that quite clearly," Merkel said. "Greece hasto do what"s necessary for Greece. But that is also importantfor all of us."
The Dutch government said there were no plans at present tobuy Greek bonds, and that the top priority for the Netherlandswas to ensure the stability of the euro.
"We don"t want to spend taxpayer money to save the Greeks,"said Jan Kees de Jager, appointed as finance minister lastTuesday in a caretaker government that will govern untilelections on June 9.
The Greek finance ministry and the European Commissiondeclined to comment on the reports of an aid deal.
But there were other signs of intensified diplomatic effortsto resolve the crisis. Papandreou said on Friday he would visitBerlin for talks with Merkel on March 5, and Deutsche Bank ChiefExecutive Josef Ackermann met Papandreou in Athens on Friday.
French Economy Minister Christine Lagarde said on Sundaythat her government and others were studying options to tacklethe crisis.
"I have no doubt that Greece will be able to refinanceitself, using means which we are currently exploring, and forwhich we have a number of propositions.
"It would involve private partners or public partners orboth," Lagarde said, declining to give further details.
German and French media reports have suggested governmentsin the 16-country euro zone might offer aid worth a total of 20to 25 billion euros ($27 billion to $34 billion) to Greece.Officials have declined to comment on the size of any aid plan.
Both Greece and EU governments face growing pressure to actfrom the debt market, which fears Athens might lose its abilityto borrow at affordable rates as a funding crunch approaches.
Greece has said its funding needs are met until mid-March,and it will need to refinance about 20 billion euros of debtmaturing in April and May. It is preparing to tap the euro debtmarket with its second bond issue this year.
Rehn was due to meet Papandreou at 1415 GMT on Monday,Papandreou"s office said. Rehn was also expected to meet Katseliat 1000 GMT and Greek Labour Minister Andreas Loverdos at 1500.
Any progress towards an aid plan for Athens could boost theeuro, as well as bond prices and banking stocks in Greece andother indebted countries on the euro zone"s southern periphery.
But any rally by the euro might be brief, because investorswould also worry that a dangerous precedent was being set forGermany and other rich states in the zone to take on theliabilities of poorer ones. (1 euro = $1.36) (Additional reporting by Matthias Sobolewski and ErikKirschbaum in Berlin, Reed Stevenson in Amsterdam, AstridWendlandt in Paris and Foo Yun Chee in Brussels; Writing byAndrew Torchia; editing by Mark Trevelyan)
Currencies Bonds
No comments:
Post a Comment