Eurozone stability of 'utmost importance': Merkel

1st June 2011, Comments 0 comments

The stability of the eurozone is of "utmost importance" to Europe and Germany in dealing with the Greek financial crisis, German Chancellor Angela Merkel said Wednesday in Singapore.

Referring to an inter-agency mission now assessing the situation, she said during a visit to Singapore that "I first need the report to say what sort of decisions will then be taken."

She stressed that "the stability of the currency area as a whole is of utmost importance to the Europeans generally but certainly also to us in Germany."

Representatives of the International Monetary Fund, the European Central Bank and the European Commission are "looking at the situation there on the ground in Greece," the German leader told journalists after talks with Singapore Prime Minister Lee Hsien Loong.

"They are going to evaluate the situation and then later on issue a report, and it is only then that we can draw the necessary conclusions from their findings," Merkel said.

Greece is trying to get another aid package from the three organisations which last year bailed out the country with a 110-billion-euro ($158-billion) loan.

German finance ministry spokesman Martin Kotthaus said Wednesday in Berlin that the report by the so-called troika was expected "by Friday night at the earliest."

On Tuesday, the Wall Street Journal had reported that German authorities might be willing to forego the countrys insistence that private investors be required to take part in a new programme to tackle the debt crisis.

But Kotthaus said Germany had "strong expectations" regarding the issue, which has pitted Berlin against directors of the ECB who warn that forcing private investors to take part could do serious harm to the Greek banking system.

"If the public sector gives more" than the 110 billion euros already agreed upon, "it is clear that private creditors must participate" as well, Kotthaus told a news conference.

For Germany to agree to more aid, three conditions had to be fulfilled, he explained.

The first was "additional measures on Greece's part," in particular regarding its fiscal policies, along with a "very concrete, tangible and intelligible plan" to privatise state-owned assets.

Thirdly, "it is important that the private sector ... assumes its responsibility," the finance ministry spokesman stressed.

"Under what form, I cannot say yet," he added.

© 2011 AFP

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