The EU should complete talks with Greece on an aid package "in days", economic and monetary affairs commissioner Olli Rehn said today, but did not provide details other than saying it would be a multi-annual programme.
In a statement read to reporters, Mr Rehn said the package would involve bilateral loans from members of the euro zone and would be conditional on Greece cutting its budget deficit.
The European Union's executive Commission, the International Monetary Fund and the Greek government have been working together on the package of measures in Athens over the past 10 days.
"I am confident that the talks will be concluded in the next days," Mr Rehn said in his statement.
"The outcome will be a multi-annual programme that will lead to major fiscal and also structural adjustment."
He said the aid - which will total at least €45 billion, with two thirds from the euro zone and the remainder from the IMF - would be delivered via coordinated bilateral loans from the euro-area member states.
"(It) will be conditional to implementing the decisions required to meet the conditions of fiscal consolidation and structural reforms," he said, referring to the need for Greece to cut its budget deficit of 13.6 per cent by at least four percentage points this year.
Mr Rehn said he hoped the financial support would give Greece "breathing space from the pressures of financial markets", where yields on Greek short-dated bonds have been pushed to record highs in recent days as investors fear a debt default.
"I want to underline that this exercise is done not only because of Greece, but for every euro area member state and their citizens to safeguard financial stability in Europe and globally," Mr Rehn said.
French budget minister Francois Baroin today said the euro zone and its partners are determined to help stabilise Greece, and restructuring its debt is out of the question.
"There is no doubt over the determination of the euro zone, of the European Central Bank, the IMF and the European Union to ensure the stability of Greece and therefore the stability of our currency," he told RTL radio.
"One must not imagine for a single second that the (Greek) debt will be restructured because that would be handing speculators a great victory," Mr Baroin said.
He also said that speculators attacking Greece were in fact attacking the entire euro zone, but that the difficulties of Portugal and Spain had nothing to do with Greece.
"Behind Greece, it's the entire euro zone that's being attacked...it's our currency, our economy, our companies, our jobs," Mr Baroin said.
Rating agency Standard and Poor's cut Greek debt to junk status this week and also downgraded Portugal and Spain, and markets in Europe and the United States tumbled as the Greek crisis was seen spreading to other highly indebted euro zone states.
Germany is seen to be holding out for strict conditions on the aid in an attempt to overcome strong domestic political opposition to the plan.
Germany's largest opposition party, the Social Democrats (SPD), is ready to move quickly to back Berlin's participation in a Greek aid package but expects banks to help shoulder costs, SPD parliamentary leader Frank-Walter Steinmeier said today.
Mr Steinmeier criticised Chancellor Angela Merkel's government for being too slow to commit to Greece, saying this had hurt Germany's image.
"Therefore it is important now that we not only debate about the seriousness of the situation, but make this seriousness the basis for decisions," he said.
"For us this means ... that we decided today not to argue any longer about the approval process (for Greek aid)."
Mr Steinmeier added, however, that his party wanted German aid for Greece to be linked to a longer-term commitment to force banks to participate in a solution to the Greek problem and steps to limit speculation in markets.
A Greek debt default would have "incalculable" consequences on financial markets and other states, Bundesbank president and European Central Bank Governing Council member Axel Weber told a German newspaper.
"In the current situation, the impact on financial markets and other states would be incalculable," Mr Weber told Bild. "Financial aid tied to tough conditions are for all parties concerned the best solution."
Mr Weber also said Greece could "turn the corner" if it moved to implement reforms of its economy in a decisive and credible way. He said kicking Greece out of the euro zone could spark huge economic and financial upheaval and that there was no legal basis for such a move.
Reuters