Washington:  Greece may believe that the easiest way out of its financial crisis would be with help from the International Monetary Fund instead of its European neighbours. It could be in for an unpleasant surprise.

Analysts say the IMF likely would demand tough conditions — going beyond the budget cuts and tax increases the Greek government already has announced and even beyond what its European Union partners would demand.

"It is politically inconvenient for European countries to force sensitive conditions on another member country," said Domenico Lombardi, a senior fellow at the Brookings Institution and a former member of the IMF's executive board.

The question of who will help Greece, and how, reached a critical moment yesterday when European leaders were to meet in Brussels to try to come up with a plan to ease the Greek debt crisis.

Greece's problems already have caused the value of the euro to fall. But the urgency goes well beyond one country and the 16-nation euro zone. An escalation of the crisis could rock worldwide financial markets as many nations are making a slow recovery from the global recession.

The Greek government says it isn't looking for money but a detailed plan that would "exert influence" on markets and lower crippling interest rates that are undermining Greek efforts to shave billions of euros from its budget this year.

Greece has ordered spending cuts and an overhaul of its tax system, promising to slash its budget deficit from an estimated 12.7 per cent of economic output in 2009 to 8.7 per cent in 2010. The measures have led to strikes and protests.

Greek officials have said at various points that the IMF would provide loans without mandating further reforms or cuts. They have appeared to use the threat of going to the IMF as leverage with European leaders, who may fear that bringing in the IMF would show that the EU isn't capable of managing its own members.

The IMF has said it won't comment, as Greece has not requested assistance.

Strict monitoring

But analysts say it is very unlikely that the international lending institution would offer loans without insisting that Greece make further deficit reductions and open itself to strict IMF monitoring, a role they say the EU may not be capable of.

The IMF will almost certainly want stricter measures as part of a longer-term plan to bring down Greece's deficit, said Eswar Prasad, an economics professor at Cornell University and former economist at the IMF.

A credible plan to bring the deficit down over the next several years could boost confidence and "actually make it easier for Greece to get out of this mess", Prasad said.

Analysts said that Greece will need to borrow about 50 billion euros (Dh245 billion) to pay off debts that are coming due this year — a figure that may require funding from both the EU and the IMF.

EU Commission President Jose Manuel Barroso has called on European governments to agree on a detailed plan.

Germany has so far blocked efforts by European nations to come up with a bailout programme, saying Greece isn't asking for help, isn't on the verge of bankruptcy and should turn to the IMF if it reaches a point where it can't borrow from world markets.

France and some EU officials had been opposed to IMF involvement. But ahead of Thursday's summit, it appeared that the EU diplomats were looking for a compromise that would involve the IMF.

No trickery allowed

German Chancellor Angela Merkel said that no "trickery" can be allowed in relation to member states' budget deficits. A euro-area default would shake the world economy, posing "uncontrollable risks," Merkel told lawmakers in Berlin yesterday.