In the face of mixed reactions in the European Union over granting loans to help resolve its huge debt crisis, Greece says it may turn to the International Monetary Fund for help if Europe cannot reach a decision by the end of the week.
German Chancellor Angela Merkel firmly rejected the possibility of providing financial aid to indebted Greece, one of the 16 eurozone countries. She justified her stance with the fact that since Greece has not officially asked for a bailout, it does not need help.
A recent poll in Germany showed that 61 percent of citizens oppose giving money to Greece. This, together with the forthcoming state elections in Germany in May, hardened Merkel’s position.
Merkel’s position put her in opposition to other major European leaders, including EU Commission President Jose Manuel Barroso who said an urgent decision on Greece must be taken at the upcoming EU summit to take place March 25-26 in Brussels.
France, Italy, and Luxembourg all support the idea of giving Greece a hand.
“We have to support Greece,” French Foreign Minister Bernard Kouchner told the media describing that support as a combined loan from the IMF and eurozone members.
Italian Foreign Minister Franco Frattini said that it is a “moral duty to intervene as soon as possible” to help Greece.
Jean-Claude Juncker, Luxembourg’s prime minister and head of eurozone finance ministers also agreed that a joint package was “quite possible” and that the European bloc “has to have an instrument available” to help its southern member.
“Greece will not be abandoned if we see it needs the eurozone’s assistance,” Juncker told the European Parliament’s economy committee.
Greece has so far asked only for aid to battle financial speculators, amounting to $68 billion, which it needs to cover itself this year. The country is now striving to obtain the political and economic support it needs in order to borrow money at reasonable rates.
Greek Prime Minister George Papandreou warned eurozone members that if they do not make a decision at the upcoming summit, he will ask the IMF for help. IMF loans are cheaper than lending rates from financial markets.
According to some analysts, Greece might be able to form a saving package even without IMF help.
Last month, the Greek government imposed harsh austerity measures, including freezing public officials’ salaries and raising fuel taxes, in order to tackle a huge budget deficit of $413 billion.
