Merkel: Greece not topic20 EU: 50 21/03/2010, Richard Wray, Angela Merkel, business, euro, Europe, European Commission, the financial crisis, Greece,

Merkel: Greece not topic20 EU: 50 21/03/2010, Richard Wray, Angela Merkel, business, euro, Europe, European Commission, the financial crisis, Greece, guardian.co.uk, IMF, news Guardian Unlimited

European Commission President Jose Manuel Barroso, has called on countries to use the Summit of the euro area to agree coordinated set of loans to be set up for Greece


The stage is set for a showdown between Angela Merkel and José Manuel Barroso, European Commission President, after the German Chancellor said that the rescue of Greece should not be on the agenda for this week's summit of the EU in Brussels.

Barroso has called for the countries of the euro area to use the two-day meeting to agree a coordinated package of loans that can be quickly implemented if the Greek government decided it needed to help reduce its budget deficit. He warned that financial markets were worried by the lack of clarity.

However, Merkel said in a radio interview that Greece was not in danger of default and aid for the country would not be a topic at the summit, which begins Thursday.

"There is no imminent insolvency," Merkel told Deutschlandfunk. "I do not think that Greece has serious financial requirements of the European Community and that is what the Greek Prime Minister keeps telling me."

She said it was the persistent speculation about a rescue was possible the creation of volatility in financial markets and warned against the rise of "false expectations" than other euro-zone economies to come to the rescue of Greece.

The euro took a fall last week, falling to $ 1.35, amid all the talk about a possible rescue plan. "I see that Greece needed money immediately and the Greek Government has confirmed. Therefore I ask you not to cause turmoil in our markets by creating false expectations for Thursday's council meeting," Merkel said.

The Greek Prime Minister George Papandreou, however, seemed to be among the European leaders a deadline for the submission of a plan to rescue its battered economy last week, warning that instead could go to the International Monetary Fund (IMF) for help, which would be seen as a humiliating political failure for the single European currency. "This is an opportunity not to be forgotten," Papandreou told the European Parliament in Brussels on Thursday. "We're expecting this from the summit next week."

But in his interview on German radio, Merkel said the Greek government had previously asked for "clarity" about the potential help, but this was just a series of "technical issues". Still no decision on whether assistance is required from the EU or the IMF, or even both organizations.

Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, said that the combined action by the IMF and the EU would be the best way to help cope with Greece, with the debt crisis. Athens has already announced a series of austerity measures, including drastic cuts in spending, as the battles with its massive debts and rising borrowing costs - which cost the Greek government to Germany twice to refinance maturing debt.

The Greek government has warned that might not be able to force through its budgetary austerity measures, which have triggered strikes and protests by the unions, if the cost of financing its deficit remains so high. As a result, may have to turn to the IMF for help.

Finance ministers from the eurozone have agreed a "coordinated" Greece's bilateral loans if government assistance requests but not the details of the plan have been disclosed. , As for Merkel, French President Nicolas Sarkozy, is understood to be cool on the idea of an EU rescue.

Merkel is concerned that a Greek rescue plan would set a dangerous precedent and, radio interview that again raised the controversial view that countries that persistently break the EU stability and growth pact could be expelled.

The Greek crisis has highlighted the fact that without the strengthening of political ties between countries, it is difficult for economic relations within the euro area remain in times of difficulty. Olli Rehn, European Commissioner for Economic and Monetary Affairs, said in an interview last weekend that the Commission should be involved in future planning of the euro area national budget "to determine the time course bad good .

Europe
Greece
Financial crisis
Euro
Angela Merkel
European Commission
IMF
Richard Wray


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