IMF, ECB pressure Germany to help Greece

28th April 2010, Comments 0 comments

The heads of the International Monetary Fund and the European Central Bank piled pressure on Germany in Berlin Wednesday to act to help floundering Greece, saying eurozone stability was on the line.

IMF chief Dominique Strauss-Kahn and ECB President Jean-Claude Trichet told a joint press conference with German Foreign Minister Wolfgang Schaeuble that Germany did not have much time to deliberate on aid to Greece.

"What is at stake is the economic situation in Greece. But it is more than that. Because Greece is part of the eurozone, because of the solidarity system of the eurozone, it is the confidence in the (euro)zone which is at stake," Strauss-Kahn said.

"And that is the reason to act swiftly and strongly ... Every day lost is a day where the situation is getting worse and which can have consequences far away."

Trichet added: "There is an absolute necessity to decide very rapidly."

Strauss-Kahn and Trichet were also to meet German Chancellor Angela Merkel later Wednesday after talks with top parliamentarians as the European Union and the IMF scramble to negotiate a rescue package for Greece.

Merkel is weighing whether to contribute to a bailout that would be deeply unpopular with voters, as she faces a key regional election on May 9.

A German contribution, expected to amount to up to 8.4 billion euros, would require special legislation to disburse the funds, which would come from the state development bank KfW and be guaranteed by the German government.

A finance ministry spokeswoman confirmed on Wednesday that the cabinet would examine a bailout bill on May 3 with the aim of having the legislation signed off by lawmakers by May 7.

Trichet also said it was his "working assumption" that talks between the Greek government, the ECB and the European Commission on austerity measures for the coming years -- a precursor to aid being disbursed -- would be wrapped up this weekend.

Two top German parliamentarians said Wednesday meanwhile that the size of the joint EU-IMF bailout package for crisis-hit Greece could be as high as 120 billion euros (158 billion dollars) over three years.

© 2010 AFP

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