EU: No agreement on Greece bailout

EU executive and German FM say no deal made after British newspaper reports otherwise.

    Many have protested the government's spending cuts that it hopes will solve the country's debt crisis [AFP]

    A German ministry spokesman said he could not believe the newspaper report was correct.

    'Not aware'

    "We are not aware that this is being planned," he said, adding that Greece had not requested any aid.

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    "Greece is implementing its (savings) programme and we expect that it will manage it alone."

    Euro zone policymakers have been debating the issue of possible financial aid for Greece for more than a month, but have so far provided only words of support.

    The Guardian said agreement on a package had been reached despite strong resistance by Berlin.

    The aid to be made available by the bailout could reach 25bn euros, the paper quoted its sources as saying. Greece's borrowing needs for the whole of 2010 total 53.2bn euros.

    It said that Euro zone finance ministers would finalise the package at a meeting of finance ministers that is due to convene on Monday.

    The bailout "will be a coordinated approach of bilateral contributions ... a bilateral contribution can be a loan or a loan guarantee. The guarantees will facilitate the kind of funds potentially needed in this context," the Guardian quoted the senior Commission official as saying.

    The agreement has been tailored to avoid breaking the ban in the rules governing the operation of the euro currency, on a bailout for a country on the brink of bankruptcy, and to avoid a challenge by Germany's supreme court, the official said.

    'Permanent damage'

    "The Greek case is a turning point for the euro zone," the Guardian also quoted Olli Rehn, the EU economic and monetary affairs commissioner, as saying in an interview with it and other European papers.

    "If Greece fails and we fail, this will do serious and maybe permanent damage to the credibility of the European Union. The euro is not only a monetary arrangement but a core political project of the European Union ... in that sense we are at a crossroads."

    Rehn said he would propose a regime of "rigorous surveillance of national budgets" including giving Eurostat, the EU statistics agency, new auditing powers over the accounts of euro zone member states.

    Greece, labouring under a crippling debt burden, announced a 4.8bn euro package of austerity measures last week designed to reduce its budget deficit to 8.7 per cent of GDP this year from 12.7 per cent in 2009.

    SOURCE: Al Jazeera and agencies


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