Eurozone finance ministers discuss Greece bailout plans

AFP - Greece's eurozone partners sought on Monday to hammer out agreement on how to help Athens rein in its massive debt, amid growing differences between France and Germany over a rake of economic issues.
   
Options for fellow euro countries were being examined by finance ministers meeting in Brussels, with Spanish Finance Minister Elena Salgado saying it would be "preferable" to reach agreement on the night.
   
She said that guaranteeing Greek debt was "one of the options" available to help Athens if EU leaders ultimately decide it is necessary, but stressed that "it hasn't been decided yet."
   
Greece has not asked for any "concrete aid" and talking figures was "very premature," Salgado stressed.
   
Diplomatic sources have spoken of 20-25 billion euros (27.5-34.4 billion dollars) being required.
   
The Greek economy is groaning under 300 billion euros of debt, and is looking to raise 54 billion euros this year just to finance the debt -- but is struggling to do so without paying premium interest rates.
   
Eurogroup head and Luxembourg Prime Minister Jean-Claude Juncker said there were "many options to be discussed" and talked down the need for emergency cash.
   
The European Commission's economic and monetary affairs chief, Olli Rehn, said "the commission is ready to table a proposal for a ... European framework of coordinated and conditional assistance," but gave no details.
   
According to reports, two plans have been prepared.
   
One entails a series of loans by European partner countries, and the other would see the commission borrow money on markets and extend loans to Greece that would be guaranteed by EU states.
   
Rehn added that Greece was on track to cut its annual budget deficit this year by four percentage points, from a huge 12.7 percent of national output.
   
Greek austerity measures have been met by a series of protests and strikes there in recent weeks.
   
The German government has been hawkish on the issue, and Finance Minister Wolfgang Schaeuble went as far as to warn that countries could eventually be kicked out of the eurozone if they did not adhere to tighter restrictions in future.
   
"We need stricter rules -- that means, in an extreme emergency, having the possibility of removing from the euro area a country that does not get its finances in order," he was quoted as saying.
   
Interim Dutch finance minister Jan Kees de Jager was similarly firm in opposing any cash bailout.
   
French Finance Minister Christine Lagarde said EU experts have been working on the contingency plan for Greece so that if money is needed "all we would have to do is press the button."
   
However, in an interview with the Wall Street Journal, she also emphasised that there was no "bailout plan" for Greece, in line with EU treaty restrictions.
   
The euro fell on Monday "largely on the back of remarks from German and French finance ministers which suggested that there would be no decision on aid for Greece," said Jane Foley of Forex.com.
   
Greek Prime Minister George Papandreou said last month that his country's borrowing needs were assured only until mid-March.
   
Ministers were also expected to debate German-driven calls for a European Monetary Fund.
   
"We need the EMF because we need stricter rules," Schaeuble told mass circulation daily Bild.
   
He said existing rules, dating from the euro's introduction a decade ago, had overlooked "the possibility that a euro country could become insolvent."
   
If Germany is adopting an aggressive stance on fiscal probity, France views the EMF as something to be explored at a later date.
   
In fact, more fundamental differences with Berlin were exposed when Lagarde accused Germany of trying to boost trade at the expense of eurozone partners by squeezing salaries and pushing exports.
   
Lagarde said she was "not sure" Germany's strategy was "a sustainable model for the long term and for the whole of the (euro) group."