MADRID (MNI) – Greece’s Finance Minister George Papaconstantinou
said here over the weekend that a letter he sent Friday to senior
European officials and the International Monetary Fund was not a request
for activation of the contingency aid plan unveiled a week earlier by
fellow Eurozone states.

The letter is “not tantamount to a demand for activation of the
[aid] mechanisms, but it is important that following [the decision by
Eurozone finance ministers week ago], everything is ready in case Greece
decides to ask for activation,” Papaconstantinou said.

Asked what the odds were that Greece would request activation of
the assistance program, he replied: “There are no odds, I’m not a
betting man. We are monitoring the situation quite closely.”

He said the Greek government will make the decision on whether or
not to request activation of the aid plan “when it has to be made. We
are not pre-announcing a decision which may or may not be made. But in
any case, for the activation to make sense, the framework will have to
be ready.”

Asked whether a certain level of market spreads on Greek sovereign
debt, or some other factor, could trigger a request for activation,
Papaconstantinou replied: “I will not give here either a very specific
test or a level of spreads. Because the market is very volatile…the
last thing I want to do is comment on these movements.”

A week ago, the Eurozone finance ministers agreed they would be
willing to provide up to E30 billion in loans during the first year of a
three-year contingency program, if Greece requested the money. The IMF
would contribute an additional amount, estimated at between E10 billion
and E15 billion, though no specific details of an IMF program have been
revealed.

Papaconstantinou last week sent a letter to ECB President
Jean-Claude Trichet, European Economic and Monetary Affairs Commissioner
Olli Rehn, and IMF Managing Director Dominique Strauss-Kahn, asking for
a meeting with all parties present to hash out the details of the full
plan.

The talks are scheduled to begin Monday in Athens. Papaconstantinou
said the discussions would focus on “conditionality issues and financing
issues.”

The finance minister said implementation of Greece’s austerity plan
— intended to cut the budget deficit this year alone from 12.7% to 8.7%
of GDP — was “going quite well” and is “beginning to bear fruit.”

He also said the Greek banking system is “solid,” because it has
“not been exposed to the kind of toxic assets that the banking systems
of other countries have been.”

–Frankfurt newsroom, +49-69-720-142; dbarwick@marketnews.com

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