EU backs Greek standby aid

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EU backs Greek standby aid

EU backs Greek standby aid
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EU finance ministers have backed plans by countries in the euro zone to help debt-stricken Greece financially if it seeks such aid.

But Elena Salgado, the Spanish Finance Minister insisted that will not be needed: “Greece for the moment, they do not need any help, they haven’t asked for any financial help, so what we did yesterday is simply to discuss on the technical issues to have some instrument ready if it is needed.”

There was good news for Athens when Standard & Poor’s affirmed its credit ratings on Greece’s debt.

The ratings agency also ended its review for a downgrade, saying the Greek government’s recent deficit reduction measures are supportive of the ratings.

However, S&P said the outlook on the rating is negative, indicating the likelihood of a downgrade over the long term.

The EU finance ministers have not said when a final decision on aid for Greece is likely.

A government spokesman in Berlin said Germany does not expect an EU summit next week to produce a decision.

Germany, which is Europe’s biggest economy, is reluctant to bail out Greece and wants Athens to demonstrate it is taking the painful steps needed to fix its finances.

The EU Monetary Affairs Commissioner Olli Rehn said that is happening: “Thanks to a substantial package of bold and ambitious measures over fiscal consolidation, Greece is now on track to achieve the target of four percent deficit reduction this year.”

At their Brussels meeting, the EU ministers failed to agree on new rules to control hedge funds.

Some countries blame the funds for making Greece’s problems worse by betting on its debt and want to make that secretive part of the finance industry more accountable.

Britain is opposed to such a clampdown.