Athens: The European Union (EU) EU pressed Greece hard to make more painful budget cuts amid reports that fellow European nations such as France and Germany are preparing a financial rescue to get the country out of its debt crisis.
Europe's financial affairs chief Olli Rehn yesterday insisted that additional measures were necessary, a view he said was shared by the European Central Bank and the International Monetary Fund.
‘Additional measures'
"I want to encourage the Greek authorities to consider and announce additional measures in the coming days" to meet deficit targets for 2010, he said after talks with Finance Minister George Papaconstantinou in Athens.
"I am aware that the effort of consolidation will not be easy," Rehn said.
"But it is my firm belief respect of the targets for deficit and debt reduction are indispensable."
Papaconstantinou said the centre-left government will do "whatever is necessary — and that includes new measures" to the budget deficit by four percentage points this year.
Rehn will also meet Prime Minister George Papandreou and other senior officials to address the austerity programme which the EU has warned must be expanded.
The talks came amid reports that officials in fellow European countries are preparing a bailout for Greece, to be finalised this week. A Greek default will be a severe blow to the shared euro currency and could hurt European banks that have bought Greek government bonds.
Calming fears
The Wall Street Journal reported that state-owned banks and bond investors in France and Germany would be willing to buy as much as $30 billion (Dh110.1 billion) in Greek bonds to calm market fears of a default. It cited anonymous sources familiar with the situation.
This could help the country meet its short-term debt needs, as some $20 billion ($27 billion) worth of government bonds mature by the end of May.
