Greece must reform to avoid insolvency: Germany's Bundesbank

FRANKFURT (Reuters) - Greece's government should stick to earlier commitments and present reform proposals to help avoid the country becoming insolvent, Germany's central bank warned on Monday.

In its monthly report, written by economists and officials at the bank, the Bundesbank used unusually frank language to describe what it called the "worrying" situation in Greece.

"The current Greek government is obliged to make appropriate proposals, to implement those agreements that have been reached and thereby do their part to avoid the insolvency of the state, with strong repercussions for Greece," officials wrote in the report.

"A sustainable solution is not possible without substantial reform in Greece," the report said. "Financial help should be linked to the relevant preconditions," it added.

Looking at the German economy, the Bundesbank predicted further expansion in the coming months.


(Reporting By John O'Donnell; Editing by Maria Sheahan)