–Germany FinMin:Don’t Expect That Greece Will Need EMU Fin Aid

BERLIN (MNI) – Greece will only receive financial aid from its
Eurozone peers if it cannot meet its funding needs on financial markets
anymore, the German government stressed on Monday.

“This decision position remains unchanged,” government spokesman
Christoph Steegmans said at a regular press conference here.

Finance Ministry spokesman Michael Offer said at the same press
conference that “we don’t hope and don’t expect that the case [of Greece
needing financial aid] will really occur.”

Markets seemed to have been calmed by Sunday’s agreement of
Eurozone Finance Ministers to make up to E30 billion in contingency
loans available to Greece this year, and more in subsequent years if
needed, Offer said. Thus, the Ministry believes that Greece can now
successfully implement its consolidation program, he said.

Steegmans compared the Eurozone aid package to a fire-extinguisher.
“That the fire-extinguisher has been filled up now doesn’t say anything
about the likelihood of a fire,” he reasoned.

Offer stressed there did not exist any agreement amongst Eurozone
Finance Ministers that a certain market rate of Greek borrowing would
automatically trigger the aid measures.

Rather, Greece has to decide first on its own if it wants draw on
the promised funds, Offer explained. Then, the European Central Bank and
the EU Commission would issue a expertise if that demand is really
justified, he said.

Finally, Eurozone members have to unanimously approve granting aid
to Greece, Offer pointed out. “There exists no automatism,” even after
Sunday’s decision, the Ministry spokesman stressed.

Given that the contribution to the aid package is calculated on the
share each country has in the ECB’s capital, Germany would have to pay
up to E8.4 billion, Offer said. Should the money be really needed, the
state-owned KfW bank would raise it and the government would guarantee
the loans, he explained.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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