Germany opposes EU's help to Greece

"A bankruptcy of Greece is not imminent and therefore it does not require any financial support from the EU," Merkel said in a radio interview.
The EU summit, therefore, will not take any decision on financial support for the government in Athens, she said.
The discussions at present are about the European Union's response in the event of Greece becoming bankrupt, she said.

"The best solution for the Euro is that Greece solves the problem on its own, with the political support of the European heads of state and government," she said.
Merkel called upon Germany's EU partners not to create turbulence in the financial markets by raising "false expectations" from the summit.
Greece does not require any assistance from the EU at present, she said.
The Greek Prime Minister George Papandreou had earlier assured her that his country will not seek any financial support from the EU.

German Finance Minister Wolfgang Schaeuble had said in a newspaper interview that there is no "common instrument" in the EU for helping nations facing debt crisis as the Union rules bar its members from taking over each other's debts.
Therefore, in extreme cases bilaterally coordinated credits are the only option. But the Greek government itself admits that such a situation does not exist, he said.
Meanwhile, the European Commission President Jose Manuel Barroso made an urgent appeal to Germany and other EU member nations to provide financial assistance to Greece.

The European Union's support is necessary for Athens "because we cannot extend the present situation," he said in Brussels.
Barroso suggested that the EU nations should agree on "coordinated bilateral credits," which need not be paid immediately.

Such readiness to support Greece will send a strong signal to the financial markets that the EU member nations are united to protect their common currency, he said.
Early last week, the finance ministers of the 16 Euro zone nations had reached a basic agreement on giving bilateral credits to Greece if bankruptcy becomes imminent.

However, after the meeting they interpreted differently their agreement and Merkel spoke of her opposition to any "hasty financial assistance" for Greece and expressed her intention to seek more stringent rules for the euro stability agreement.
She suggested that new rules should make it possible to expel from the euro family nations which put the stability of the common currency at risk.

The European Commission and most of its member nations support the Greek government's position that financial support from the EU will help restore the country's credit worthiness and enable it to get credit from the capital markets.
The government says interest rates on the country's debts, totalling more than USD 300 billion, are crippling the Greek economy and it has to pay higher interest for fresh loans after several rating agencies downgraded its ratings.
It is estimated that Greece needs this year new credits of around 54 billion euros from the financial markets.