Markets snub pledge to help Greece

EU leaders are meeting through Thursday afternoon at a summit delayed by snow and buffeted by winds that toppled flags of EU nations as leaders entered the meeting hall. The leaders may come up with more comments on Greece later in the day but there was no sign money was being put on the table.

Among possibilities for Greece that have been floated in recent days are EU member countries guaranteeing Greece's debt, a special credit line for the Greek government, and bilateral loans.

German Chancellor Angela Merkel talked down a full financial bailout, but said other European governments would not leave Greece in the lurch.

“We won't let Greece be alone but there are rules and they have to be respected and based on that we'll issue a statement and an explanation,” she said.

French government sources said France and Germany want to offer only “political support” at this stage and that more precise plans of real help would come at a later stage. The official, who spoke on condition of anonymity because of the sensitivity of the issue, did not provide specifics.

A senior German official said that “no concrete aid measures are being considered for Greece or other countries” and that “there is no financing need at the moment” for Greece.

He said he expects Greece to come clean with details of spending cuts this year, going far beyond general promises to overhaul its public sector and reform pensions and health care.

Greece needs to borrow euro54 billion (nearly US$75 billion) from bond markets this year to plug its budget gap. So far it has been able to borrow from markets but is facing increasing interest costs as markets price in higher risk of a possible default.

Greek Prime Minister George Papandreou has promised to reduce Greece's deficit to 8.7 percent of gross domestic product this year, from 12.7 percent last year, the highest in the EU and four times above an EU limit.

But markets doubt Greece's credibility after it admitted falsifying statistics for years to make the deficit look smaller. They also worry that Greece can't carry out any cuts because it risks social unrest.

Greek workers shut down schools, grounded flights and walked out of hospitals Wednesday to protest austerity measures, and a much broader strike is planned for Feb. 24.

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