–Says At Least Two Countries Oppose Loan Guarantees

BRUSSELS (MNI) – Bilateral aid to Greece could take a two-pronged
form, coming partly from the International Monetary Fund and partly from
the Eurozone member states, Jean-Claude Juncker, head of the Eurozone
finance ministers’ group, the Eurogroup, said Monday.

An aid package for Greece, if needed, wouldn’t take the form of
loan guarantees since at least two member states oppose that method,
Juncker, who is also the finance minister and prime minister of
Luxembourg, told members of European Parliament at a hearing.

“The message is clear, Greece has adopted an ambitious and credible
program which must convince the markets,” he said. “If the financial
markets don’t want to be convinced…Europe must show solidarity with

“The only solution is bundled bilateral aid from the member states
to Greece, and we are working on this instrument but I don’t think it
will be necessary,” he said.

“We are not leaving Greece in the lurch,” Juncker said. “If the
financial markets do not act in the way which we wish, in a way that is
reasonable, the Eurogroup has to have an instrument available to it,”
Juncker said.

But he reiterated that “Greece has not requested assistance; the
Greek program is credible.”

The Eurogroup president said he didn’t think that involving the IMF
in a Greek aid package would be the best option, but that it hadn’t yet
been discounted.

“It is too early to say anything definitive on this,” he said,
adding that he could foresee a situation where a “double instrument” was
proposed, partly funded with assistance from IMF and a larger part
funded by the Eurozone countries.

However, the Bundesbank said Monday in its March monthly bulletin
that aid for Greece would be inconsistent with the IMF mandate, which is
to help countries having balance of payment problems — not, as is the
case with Greece, public deficit issues.

Juncker said “there are at least two member states” who oppose the
idea of assisting Greece with loan guarantees.

“I don’t think that’s going to change anytime soon and therefore I
see no point speculating about that instrument further.”

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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