Rescue plan

German Chancellor Angela Merkel defended her cabinet's decision on Monday to offer debt-ridden eurozone member Greece 22.4-billion euros ($29.7 billion) as part of an unprecedented EU bailout plan.

"A stable European currency is an extremely valuable commodity," the chancellor said at a press conference in Berlin.

Merkel added that a European ratings agency "could be useful" in the wake of the Greek debt crisis.

Foreign minister Guido Westerwelle told reporters that the aid was not a "blank check," and echoed Merkel's call for the creation of a European ratings agency.

Germany, the eurozone's largest economy, is to contribute the most significant part of the loan package, with the total European contribution expected to be around 110 billion euros, spread out over three years.

Germany's contribution was called the "fattest check in history" by the mass-circulation Bild newspaper on Monday. Berlin was hesitant about making the contribution, as the vast majority of Germans remain opposed to the loan package for Greece.

Merkel, Schaeuble back plan

On Sunday however, Merkel had indicated her government's full support of the measures, saying there was "no alternative" but to help Greece repay its debts.

"I think this is the only way we can restore the stability of the euro," Merkel told the Welt am Sonntag Sunday paper. "I'm going to work for the Greece program and its passage."

German Finance Minister Wolfgang Schaeuble told the Bild newspaper on Monday that the rescue package was "sufficient to stabilize the country on a long-term basis," adding, however, that more funds were available if needed.

He said it was unlikely - despite the high amount pledged - that German taxpayers would be forced to pay for the loan.

He also warned Greece that "the smallest deviation (from the austerity plan) would have consequences, that much is clear."

Euro-zone aid coming right on time

European governments and the International Monetary Fund agreed on Sunday to the package comprising 110 billion euros in loans over three years.

Eurozone governments, like Germany, are now rushing to pass legislation that will allow the funds to flow to Greece.

Christine Lagarde, France's finance minister, said on Europe-1 radio on Monday that the funds were "not a donation, not a subsidy," but rather a loan to help the country balance its public finances.

Later on Monday, Lagarde is expected to appear in front of France's lower house of parliament to present a budget amendment allowing the government to release French aid funds.

Greece hopes to receive the funds from the European Union and the International Monetary Fund just in time to honor debts of nine billion euros, due on May 19.

"We need the loans by May 19; everything was done on the basis of this date," a Greek government source said on Monday.

A fresh EU summit has been slated for Friday, May 7, to officially approve the loan package.

smh/glb/AFP/AP
Editor: Chuck Penfold