Simon Kennedy and Maria Petrakis
Feb 28, 2010
European Union governments are piecing together a possible rescue package for Greece as they demand it first intensifies efforts to slash the bloc’s biggest budget deficit.
With EU Monetary Affairs Commissioner Olli Rehn flying to Athens tonight for talks, German lawmakers say euro-area officials are crafting a plan to grant Greece about 25 billion euros ($34 billion) in aid should the need arise, possibly by using state-owned lenders such as Germany’s KfW Group to buy its debt.
Luxembourg Prime Minister Jean-Claude Juncker signaled today that Rehn will use his visit to warn Greece it must do more to regain control of its budget and can’t rely on taxpayers elsewhere to help until it does. Adding to the political pressure, the fiscal strategy of Greek Prime Minister George Papandreou’s government may soon be tested by investors as it readies a sale of as much as 5 billion euros of 10-year notes.
“Greece won’t be allowed to sink on the condition it respects its commitments to stabilize its budget,” French Finance Minister Christine Lagarde told Europe 1 radio today. “We have a certain number of proposals in the euro zone, involving either private partners or public partners or both.”
This article was posted: Sunday, February 28, 2010 at 7:14 am