Top EU official: Greece must do more to end crisis

Associated Press
European Commissioner for Economic and Monetary Affairs Olli Rehn and Governor of the Austrian National Bank Ewald Nowotny, from left, attend a press conference after a meeting of the National Bank on "The Future of European Integration: Some Economic Perspectives" in Vienna, Austria, on Monday, May 23, 2011. Rehn, the European Union's top financial official is urging Greece to bring its finances in order and start selling state holdings to show that it is serious about mastering its financial crisis. (AP Photo/Ronald Zak)

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VIENNA (AP) — A top EU official urged Greece on Monday to sell more state holdings to reduce its debt crisis and show it is serious about regaining market trust.

Austria's chief banker, meanwhile, suggested that foreign banks in Greece might be asked to commit to keep doing business there along the lines of a plan that shored up sagging East European economies in 2009.

Beyond "an agreement with the (international) banking community to stay on board," National Bank governor Ewald Nowotny said that 2009 plan included "additional funding to give (the region) some kind of growth perspective" — a possible hint that the EU Commission and international financial institutions are considering more financial support for the country.

Investors are increasingly convinced that Greece will need more financial help on top of last year's euro110 billion ($157 billion) to avoid a default.

EU Monetary Affairs Commissioner Rehn said Athens must act "in the coming days and weeks" to convince other European Union nations and lending institutions that it is serious about overcoming its huge monetary deficit.

"Greece needs to take a decision on how it will meet its fiscal target for this year," Rehn said at a joint news briefing with Nowotny outside a conference focusing on Greece, bank stress tests and other EU financial and economic priorities.

The two spoke ahead of a government meeting in Athens to discuss a massive cost-cutting and privatization program through 2015, two years beyond the government mandate. That meeting comes after Greek borrowing rates hit a new record margin — or spread over the benchmark German rate, spiking over 16 percent for 10-year bonds.

Greece suffered another bond downgrade late Friday from the Fitch ratings agency, and Prime Minister George Papandreou later conceded plans to return to bond markets next year may not be achievable.

The European Union wants cross-party support in Greece for 2011-2015 austerity program, worth at least euro23 billion ($32.8 billion). Papandreou will on Tuesday meet opposition leaders.

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