Germany rules out immediate financial assistance to Greece

LUXEMBOURG (Reuters) - Germany and all euro zone countries on Friday ruled out any immediate and concrete assistance for Greece to resolve their financial problems at the start of a diplomatic tour of the Hellenic Premier George Papandreou.

Greece hopes to resolve its debt crisis received a significant boost Thursday when a significant release of new debt of the country received strong demand, and European leaders on Friday turned to applaud the new austerity measures announced by Athens.

But an opinion poll showed strong opposition in the Greek public opinion to wage cuts, a freeze on pensions and tax increases,

Furthermore, Greek unions increased their pressure against the government, to call a new strike for 11 March.

Prime Minister of Luxembourg Jean-Claude Juncker, also chairman of the Eurogroup, and German Chancellor Angela Merkel has discouraged any hope that Papandreou in Greece can secure financial assistance at its meetings on Friday.

"The measures are strong and rigorous. The commitment made by the Greek Government clearly sets the tone for an exit from the situation that is Greece," Juncker said after meeting with Greek Prime Minister in Luxembourg.

But Juncker, who has great influence in chairing the monthly meetings of the Eurogroup finance ministers, made clear that an intervention to help Greece is very unlikely.

"I think we were right when we said (...) that we are ready to take decisive and coordinated action if necessary. I do not think these measures are needed," he said.

Merkel was limited to providing moral support to Attentive, saying at a conference in Munich: "We must stand in solidarity next to Greece."

But a spokesman for the chancellor said his meeting with Papandreou on Friday will focus on giving political support to Athens and no financial assistance.

"The Government does not intend to give a penny," said German Economy Minister, Rainer Brueder.

Momentum by selling bonds

The financial crisis threatens the credibility of Athens and the euro, despite the reluctance of the Eurogroup to deliver economic aid, they are not to Greece to attend the International Monetary Fund for support, since this step would be considered a sign of weakness .

Next week, Papandreou will go to Washington to meet with President Barack Obama, but an IMF spokesman said the Greek leader had no plans to meet with representatives of the organization.

Athens needs to raise 53,000 million euros (72,000 million) this year, including at least 20,000 million dollars should be available by the end of May to pay its outstanding debt and cover its high budget deficit.

One day after the government announced austerity measures 4,800 million euros for 2010 to reduce its budget deficit, the sale of 5,000 million in 10-year bonds on Thursday night was a demand for more than three times its value.

The bond sale provided evidence that investors believe that the steps the government can be effective.

The head of the debt management agency of Greece said that most of the bonds were placed outside of Greece, which shows the willingness of foreign investors to buy debt Hellenic to higher yields.

The yield spread between the notes of Greece and benchmark bonds in the euro zone, German Bunds, was reduced after the issuance of debt in Athens. This premium fell to 288 basis points from 299 points on Thursday.

The cautious stance of Merkel and the hostility of his party colleagues FDP coalition, have stoked tensions between his country and Greece. Some lawmakers have called for Germany Greeks pay reparations to the country by the Nazi occupation.

But let Greece face their problems without help from his colleagues could further disrupt markets. This could lead to problems of Athens is spreading to other euro zone countries such as Spain and Portugal, a scenario that would deepen the crisis in the eurozone.

PUBLIC IRA

The Athens government also faces a series of protests against austerity measures. The GSEE private sector union announced a strike for 11 March, while his counterpart in the public sector ADEDY, said that employees will join the blanket measure.

The two unions represent some 2.5 million workers, nearly half the country's workforce.

An opinion poll conducted by Public Issue for Skai TV channel showed that two thirds of the 530 respondents rejected the hike in fuel taxes, VAT, the public pension freeze and cuts in bonuses for public employees.

Despite this, the Greek parliament on Friday approved a bill that contains many of these new austerity measures, a key step for its implementation.

"The project was approved," said the speaker of parliament, Filippos Petsalnikos, after the vote.

(Additional reporting by Lefteris Papadimas Angeliki Koutantou and in Greece and Paul Carrel in Berlin)