Economic Affairs Commissioner Olli Rehn has said he expects a reduction in the rate of interest Ireland is charged for the EU portion of the bailout to be agreed "shortly".

Rejecting arguments of a "moral hazard" in easing the terms of the bailout, Mr Rehn said the position of any national leader requiring a bailout for his country was not somewhere "any leader would want to be".

Mr Rehn said he believed debt sustainability - whether or not a state could afford to manage the debt - was a more pertinent criteria than moral hazard.

"It is important that in defining the interest rate, debt sustainability is firmly taken into account and therefore the commission already some time ago proposed a reduction of the interest rate for Ireland in order to help Ireland overcome its debt burden in the same way as Greece or Portugal," he said.

The time frame for agreement on the reduction in interest rates charged to Ireland is understood to be the meeting of European finance ministers due to be held on Monday and Tuesday of next week.

"I would expect that this kind of agreement could be taken shortly," he said.

Taoiseach Enda Kenny told the Dáil today that the State's European partners have not yet agreed to give the country a cut in the cost of its emergency borrowings.

"The negotiation on the interest rate has not concluded yet," Mr Kenny. "After the meeting next week we will know whether a conclusion can be reached."

At next week's meeting Mr Rehn will be asking EU states to formally endorse the terms of a €78 billion bailout package for Portugal.

However Mr Rehn said it was "premature" to speculate on a new bailout package for Greece as an EU-IMF progress report on the first year of the package was still to be fully assessed.

Referring to some member states' resistance to the Portuguese bailout package, or to new terms for Greece, Mr Rehn said the decision rests with member states who he said were "the masters of the Commission this matter".

Asked particularly about Finnish reluctance, Mr Rehn said: "I trust Finland can support (the bailout) for the sake of economic stability of the EU as a whole - and that includes Finland itself".

Mr Rehn also said the euro is a "stable currency".

"We do not have a crisis of the euro. We have a sovereign debt crisis in some euro zone countries," he said. .

Separately, German chancellor Angela Merkel has refused to commit to more aid for Greece, saying that it is still too early to decide whether the Greek government will need more financial help to overcome the debt crisis.

"First we need to hear what the status is. Only then can I decide what, if anything, needs to be done," Dr Merkel told reporters in Berlin today. Dr Merkel said speculating about further aid would do Greece no favours.

An assessment of the government's progress in meeting reforms conducted by the International Monetary Fund, the European Commission and European Central Bank is not due until next month, Dr Merkel said.

"I'm the kind of person that draws conclusions when I've seen the results and analysed them," she said. "Nothing will keep me from doing that."

Greece today denied reports it was discussing a new €60 billion bailout with international lenders.

Prime minister George Papandreou called a cabinet meeting tomorrow ahead of the key EU-IMF decision - at stake is the next, €12 billion bailout tranche due in June, essential to pay €13.7 billion of imminent funding needs.

"Greece is fighting a difficult battle amid these fluid, difficult and unexpected conditions in the European Union," Mr Papandreou told president Karolos Papoulias. "We need a wider sense of unity and solidarity."

Dow Jones reported that Athens may clinch a deal for a new aid package as soon as June in exchange for strict measures but the report was quickly denied by Greek and EU officials.

"Greece is not holding any discussion on any new aid package," a senior finance ministry official said. "Such reports about discussions on new aid are not true."

Earlier today, European Central Bank policymaker Ewald Nowotny said he favoured giving Greece more time to repay its financial aid rather than issuing new loans.

Mr Nowotny and fellow ECB executive board member Lorenzo Bini Smaghi both said a Greek debt restructuring would damage both Greece and other countries in the 17-member euro zone.

"You have to be aware that this would immediately have massive consequences for the Greek banking system and for the banking system overall," Mr Nowotny told Austrian radio. "That would only heighten the crisis."

Mr Nowotny said it was primarily up to Greece to put its financial house in order and that a restructuring must be avoided.

Asked whether Greece would get fresh loans, Mr Nowotny said: "The first step has to be on Greece's side. Only when we have a clear view here can we consider whether the existing programme must be rounded out, but that is something one can judge only in the weeks ahead."

Mr Bini Smaghi said an exit from the euro by Greece would hurt not just Greece but other countries too.

"I cannot understand the idea on the other hand of making more aid conditional on some kind of debt restructuring of the country receiving aid," he said.

He said that would produce "perverse behaviour" allowing part of the debt not to be paid in exchange for more debt.

Additional reporting: Agencies