Italy's FM "worried" by German resistance on Greece

Germany's resistance to the disbursement of emergency loans for Greece is "very worrying" Italy's foreign minister Franco Frattini said. It may need a summit of European Union leaders to be overcome, Frattini said on Monday. Italy's FM "worried" by German resistance on Greece Facing mounting risk premiums over its government bonds as investors fear a default, Greece asked Friday for a 30-billion-euro (45 billion dollars) loan from eurozone partners to be activated, which is expected to be topped up with 10 billion euros (15 billion dollars) from the International Monetary Fund (IMF). But, despite eurozone ministers having already agreed to set up the rescue mechanism, German officials insisted over the weekend that its approval was not a foregone conclusion, and that any release of the funds depended on Greece adopting more cuts to trim its budget deficit. "I am worried by some of the rigidities that Germany has shown," Frattini said in Luxembourg, where a meeting of EU foreign ministers was due to start. "We cannot avoid showing solidarity towards Greece, even if someone has doubts solidarity has to prevail in this moment, because it is not only a moral obligation but it is in our interest," he added. Frattini insisted that helping Greece was necessary to strengthen confidence in the whole of the eurozone, preventing speculative attacks on other countries with large deficits. "We are very worried. I think that, if the Greek risk spreads to other countries - Portugal has been named - this would mean that we have to save our common enterprise," he said. The Italian minister accepted Germany's argument that Greece had to deliver on the budget cuts it promised to euro area partners, but insisted that "Europe needs to take a step forward" in helping it. "If we won't manage it, perhaps a meeting of (EU) leaders could be necessary," he warned, signaling that the approval of the Greek rescue package could take longer than expected.

Italy's FM "worried" by German resistance on Greece

Facing mounting risk premiums over its government bonds as investors fear a default, Greece asked Friday for a 30-billion-euro (45 billion dollars) loan from eurozone partners to be activated, which is expected to be topped up with 10 billion euros (15 billion dollars) from the International Monetary Fund (IMF).

But, despite eurozone ministers having already agreed to set up the rescue mechanism, German officials insisted over the weekend that its approval was not a foregone conclusion, and that any release of the funds depended on Greece adopting more cuts to trim its budget deficit.

"I am worried by some of the rigidities that Germany has shown," Frattini said in Luxembourg, where a meeting of EU foreign ministers was due to start.

"We cannot avoid showing solidarity towards Greece, even if someone has doubts solidarity has to prevail in this moment, because it is not only a moral obligation but it is in our interest," he added.

Frattini insisted that helping Greece was necessary to strengthen confidence in the whole of the eurozone, preventing speculative attacks on other countries with large deficits.

"We are very worried. I think that, if the Greek risk spreads to other countries - Portugal has been named - this would mean that we have to save our common enterprise," he said.

The Italian minister accepted Germany's argument that Greece had to deliver on the budget cuts it promised to euro area partners, but insisted that "Europe needs to take a step forward" in helping it.

"If we won't manage it, perhaps a meeting of (EU) leaders could be necessary," he warned, signaling that the approval of the Greek rescue package could take longer than expected.