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To: Maurice Winn who wrote (72732)	3/7/2010 2:33:29 PM
From: Haim R. Branisteanu	Respond to of 74559

Sarkozy:Working On Contingency Support Plan For Greece By Gabriele Parussini Of DOW JONES NEWSWIRES PARIS (Dow Jones)--French President Nicolas Sarkozy Sunday said a number of European Union countries were preparing a support package for Greece, even though he doesn't believe the Greek government will need financial help. Speaking alongside Sarkozy, Greek Prime Minister George Papandreou said he was now convinced that the EU has the political will to support his government as it struggles to borrow EUR54 billion this year at an interest rate that would allow it to cut its huge budget deficit. Papandreou's meeting with Sarkozy is part of a five-day tour of foreign capitals meant to shore up support for Greece on both sides of the Atlantic. There are concrete, precise tools that we are studying, about which we are not disclosing any more details tonight, but which will allow us to show, when the time comes, that not only does Greece have political support, it will be supported in all possible aspects," Sarkozy said during their joint press conference. Sarkozy said Finance Minister Christine Lagarde is working on the plan with her EU peers, with the president of the European Central Bank and with Jose Manuel Barroso, the head of the European commission. The logic, Sarkozy said, is that when a euro-zone country is under attack from speculators, it must be able to rely on its partners. "When there are speculative movements, we have no interest to explain what we'll do in case it were necessary," Sarkozy said. "We have measures, we are ready, we are determined." The development of an EU plan to rescue Greece means the International Monetary Fund's role will be limited to providing technical advice to the Greek government. Papandreou is due to meet the IMF during a visit to Washington D.C. Tuesday. Indeed, some EU members are mulling the creation of an equivalent to the IMF, which would be known as the European Monetary Fund and provide support to euro-zone members. German Finance Minister Wolfgang Schaeuble floated the idea in an interview with weekly Welt am Sonntag. "We aren't planning an institution to rival the IMF but we need one for the inner stability of the euro zone, which has the experience of the IMF and the equivalent authority," Schaeuble told Greece somewhat eased investors' fears Thursday, when the government's offering for a 10-year bond attracted bids worth almost three times the EUR5 billion on offer. However, bonds had a yield of about 6.3%, making it almost twice as expensive as German government borrowing. When it borrows EUR5 billion at that rates, Greece is paying EUR750 million more than Germany, Papandreou said. He added that the interest rates now being demanded by investors are "not viable for the [Greek] economy," and what Greece needs is to be able to borrow at rates similar to those paid by other euro-zone members. Greece, the European Union's most indebted country, will face its biggest challenge in April and May, when more than EUR20 billion of debt comes due for repayment. So far, Greece has raised EUR13.6 billion. In Berlin Friday, Chancellor Angela Merkel signaled that Germany and its European Union partners would intervene to rescue Greece if its problems threatened to spiral out of control, but emphasized that she's optimistic that Athens won't need help. The Greek parliament approved a EUR4.8 billion austerity package on Friday as thousands of union members protested the spending cuts and tax increasing on the streets outside. -By Gabriele Parussini, Dow Jones Newswires; +33 1 4017 1740; gabriele.parussini@dowjones.com