MercoPress. South Atlantic News Agency

Germany denies “concrete” aid package for Greece

Der Spiegel, Germany’s leading magazine announced the 20 billion Euro package but mentioned no sources

Germany’s Finance Ministry said on Saturday it has no specific plans for helping Greece combat its deficit crisis, denying a magazine report that euro-area governments may offer as much as 25 billion Euros in aid.

It is “incorrect” that Germany is considering a “concrete” plan for countries sharing the Euro to pump billions in financial aid to Greece, ministry spokesman Martin Kreienbaum said in an e-mailed statement. “The Finance Ministry has taken no decisions in this regard,” the statement said.

Der Spiegel magazine reported earlier that Germany is considering asking Euro-area governments to help provide Greece with loans and guarantees worth 20 billion Euros to 25 billion Euros, conditional on steps by the government to cut the deficit. Germany would finance almost 20% of the aid, the magazine said in article for its Feb. 22 edition, without saying how it got the information.

Greece is “not requesting money from any European Union taxpayer,” government spokesman George Petalotis said in an e- mailed statement Saturday, echoing Prime Minister George Papandreou’s stand. Greece needs “the necessary time and political support to overcome the economic crisis,” he said.

European Union leaders ordered Greece on Feb. 11 to get the bloc’s highest budget deficit under control and promised “determined” action to protect the Euro, without offering specific steps to help Greece handle its debt load. EU finance ministers who met on Feb. 15 and 16 also didn’t give specifics.

European Commission spokesman Amadeu Altafaj Tardio declined to comment on the Spiegel report. The commission, the EU’s executive arm, stands by the statements issued by government leaders on Feb. 11 and by finance ministers this week, he said.

German aid would flow from the state-owned development bank KfW Group, Der Spiegel said. The Frankfurt-based bank isn’t aware of any such plans, spokesman Wolfram Schweickhardt said.. The government hasn’t decided on any “aid instruments,” the Finance Ministry’s Kreienbaum said.

Greece is currently trying to rein in a deficit of 12.7% of GDP, more than four times the limit allowed by Euro zone regulations. The government of Greek Prime Minister Georgiou Papandreou said it was aiming to reduce the deficit to below 3% by 2012.

Papandreou said he was confident this ambitious target could be met by clamping down on bribery and corruption. “We need to understand the crisis as a chance to launch the necessary reforms,” he said in an interview for a separate report also to run in Der Spiegel on Monday.

Greece's economic woes have hit the Euro currency hard, threatening to plunge the economic bloc into its first fully fledged crisis since the creation of the Euro more than 11 years ago.