Euro officials downplay Greece bailout

MADRID (AP) — European officials played down signs Friday that Greece would seek a 30 billion-euro bailout package from other eurozone nations within days as finance ministers from the 16 countries met for talks in Madrid.

Luxembourg’s Jean-Claude Juncker, who heads the group of euro finance ministers, told reporters that “there is nothing in the air which makes me believe that this will come up today.”

“Today is not the day for a decision on Greece,” Spanish Economy Minister Elena Salgado told reporters before going into the meeting.

German Finance Minister Wolfgang Schaueble told Suedwestrundfunk radio that he believed Greece may not need the financial lifeline agreed by eurozone countries last Sunday.

“We still believe that the Greeks are on the right road, and that in the end they perhaps won’t need to take up the aid at all,” he said.

Greece asked the European Commission, the European Central Bank and the International Monetary Fund (IMF) to step up work on the aid package Thursday. EU and IMF officials will visit Athens on Monday.

The Greek government said its request for more details on bailout loans was not a signal that the country would seek aid.

Prime Minister George Papandreou told the Greek parliament Friday that “we are making all preparations as required,” describing the financial pledge as “a safe haven.”

However, the promise of aid has failed to calm markets who are still charging high interest rates for Greece to borrow. The spread, or difference in yields, bet-ween Greek and benchmark Germany 10-year government bonds remains high at around 4.15 percentage points Friday.

Investors are demanding high interest rates for Greek bonds because they believe Greece could be unable to repay debt despite recent efforts to cut a massive budget gap.

There is still uncertainty over the bailout package and how long it would take to be paid out widened the spread Wednesday after a German official said the parliament would need to approve Germany’s share, the largest at 8.4 billion euros. That could take months.

The Greek government said Thursday it would hold “systematic negotiations” on the standby loan package with other members of Europe’s currency union at a two-day meeting in Madrid.

The IMF has not yet said how much it would pledge – and whether it could offer aid faster than European treasuries. EU officials said they expected the IMF to provide some 15 billion euros.

Greece needs to borrow some 11 billion euros next month and has already raised nearly half of the 54 billion euros it wants to borrow this year. The country is also under pressure to toughen an austerity program to show that it is committed to reducing a deficit from around 13 percent of national income last year to some three percent in 2012.

Greece’s flagrant flouting of EU debt and deficit limits has triggered drop in the euro’s value against the dollar and exposed the flaws in the loose way eurozone governments are supposed to coordinate their economies.

Most eurozone nations are now running deficits above the EU’s maximum three percent and are promising to reduce those over the next few years.