Economy Minister Louka Katseli said Prime Minister George Papandreou would review Greece's fiscal plans, after an EU mission to Athens last week decided that the country's austerity measures were not strong enough to reassure financial markets.
"If more measures are to be taken, they will be announced soon," Katseli told state television. "The red line for everyone in this government is that the measures are effective, bringing additional revenues, and that they are socially just."
EU Economic Affairs Commissioner Olli Rehn was due to visit Athens today (1 March) for talks with Greek officials about the crisis, which has rocked Europe's debt market and undermined investors' confidence in the common euro currency.
The market has been speculating that Rehn's visit, if successful, could move EU governments closer to announcing some form of emergency aid for Greece in exchange for a pledge by Athens to take fresh budget steps.
A German member of the European Parliament, Jorgo Chatzimarkakis, said on Saturday that Germany, France and the Netherlands would buy Greek bonds in the deal, using state-run banks such as Germany's KfW and France's Caisse des Depots.
It was unclear how Chatzimarkakis, who is not a high-profile politician in Germany, might know of such a plan. His comments echoed a similar report on Saturday in major Greek newspaper Ta Nea, which quoted unnamed sources.
Germans, Dutch say no decision made
German Chancellor Angela Merkel said in a television interview on Sunday that she was grateful the Greek government was planning "very courageous" steps to curb its budget deficit.
She repeated comments, first made last week, that the euro was in its toughest period since its launch in 1999 - possibly an effort to prepare German public opinion, which is strongly against aiding Greece, for intervention by Berlin in the crisis.
But Merkel stressed no decision had been taken on financial assistance to Greece, and that Berlin continued to expect Athens to take whatever steps were necessary to resolve its problems.
"There have been absolutely no other decisions taken. I would like to say that quite clearly," Merkel said. "Greece has to do what's necessary for Greece. But that is also important for all of us."
The Dutch government said there were no plans at present to buy Greek bonds, and that the top priority for the Netherlands was to ensure the stability of the euro.
"We don't want to spend taxpayer money to save the Greeks," said Jan Kees de Jager, appointed as finance minister last Tuesday in a caretaker government that will govern until elections on 9 June.
The Greek finance ministry and the European Commission declined to comment on the reports of an aid deal.
But there were other signs of intensified diplomatic efforts to resolve the crisis. Papandreou said on Friday he would visit Berlin for talks with Merkel on 5 March, and Deutsche Bank Chief Executive Josef Ackermann met Papandreou in Athens on Friday.
France considering aid plan
French Economy Minister Christine Lagarde said on Sunday that her government and others were studying options to tackle the crisis.
"I have no doubt that Greece will be able to refinance itself, using means which we are currently exploring, and for which we have a number of propositions.
"It would involve private partners or public partners or both," Lagarde said, declining to give further details.
German and French media reports have suggested governments in the 16-country euro zone might offer aid worth a total of 20 to 25 billion euros to Greece. Officials have declined to comment on the size of any aid plan.
Both Greece and EU governments face growing pressure to act from the debt market, which fears Athens might lose its ability to borrow at affordable rates as a funding crunch approaches.
Greece has said its funding needs are met until mid-March, and it will need to refinance about 20 billion euro of debt maturing in April and May. It is preparing to tap the euro debt market with its second bond issue this year.
Rehn was due to meet Papandreou on Monday, Papandreou's office said. Rehn was also expected to meet Katseli and Greek Labour Minister Andreas Loverdos in the afternoon.
Any progress towards an aid plan for Athens could boost the euro, as well as bond prices and banking stocks in Greece and other indebted countries on the euro zone's southern periphery.
But any rally by the euro might be brief, because investors would also worry that a dangerous precedent was being set for Germany and other rich states in the zone to take on the liabilities of poorer ones.
(EurActiv with Reuters.)
