German Official: No EU, Bilateral Aid For Greece On EU Agenda

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BERLIN (Dow Jones)–Euro-zone finance ministers scheduled to talk about Greece this afternoon are unlikely to make any decision and there is no aid for Greece on the agenda of Thursday’s summit of European Union leaders, a senior German government official said Wednesday.

The official added that Germany will stick to the European Union bailout clause and at present no EU or bilateral aid for Greece is on the meeting’s agenda or is planned.

The comments come before an informal summit held by the EU in Brussels, where leaders will focus on Greece’s debt crisis as part of a broader assessment of post-recession government debt levels.

“There doesn’t exist any decision on such aid and it also isn’t pending at present,” said the senior government official at a press conference on Thursday’s meeting. The official added that for Germany, Greece has the responsibility to deal with its budget woes.

The euro and peripheral euro-zone government bonds, such as those from Greece, Spain and Portugal, have been under pressure due to fears that Greece may default on its debt.

The EU summit is widely expected to work on further steps to help Greece shore up public finances and restore calm to financial markets.

The official also said there is no doubt within the German government that Greece can service its debt obligations, given recent over-subscription of its bonds, and no one has suggested anything to Greece, such as the restructuring of its debt.

The commission and the European Central Bank have requested extra efforts and Greece will present amendments to its existing plans to tackle its high budget deficit Thursday, the official said, adding that there isn’t yet an agreement on the size of extra measures needed.

The country is responsible for dealing with its debt problems, the official said.

Market reactions will take into account the credibility of Greece’s restructuring plan, a second official said at the same briefing.

A finance ministry spokesman said earlier Wednesday that “no decisions concerning aid have been made. We are working on preparing further restructuring steps with Greece in preparation for the European summit, in a move to calm markets.”

Tuesday, the EU’s economic and monetary affairs commissioner at the time, Joaquin Almunia, said EU leaders should support Greece as the government tackles its fiscal crisis.

The official also said German Chancellor Angela Merkel and French President Nicolas Sarkozy agree on all EU summit issues and will hold a joint press conference following the meeting.

By Andrea Thomas

FEBRUARY 10, 2010, 10:00 A.M. ET

Source: The Wall Street Journal

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