–Adds Comments To Story Sent At 12:59 GMT

BERLIN (MNI) – The German government does not expect a decision on
financial aid for Greece at the meeting of EU leaders in Brussels
Thursday and Friday, a high ranking German government official said
Wednesday.

This topic “is not on the agenda,” the official stressed. “We don’t
see any decision about aid for Greece there.” Thus, he also does not
expect that the Greece issue will be mentioned in the communique of the
EU Council meeting.

The source reminded that EU leaders had declared on February 11
that they would step in to assure the stability of the Eurozone only as
a last resort. There is currently no need for such action, “thus, there
is no need for a decision about possible aid for Greece,” he argued.

“We have always stressed that such aid is not on the agenda because
neither has Greece asked for it nor is the objective situation as such
that it would be necessary,” he said.

The question is not if the Eurozone will help but how and when, he
emphasized.

Financial aid for Greece can only be taken into consideration “when
all other means are exhausted and a [EMU] member state cannot meet its
financing needs on capital markets anymore,” the official explained.

If this situation should arrive, then there would be a financial
aid package “in which the IMF is significantly involved,” the source
stressed. He added that the German government is not worried that an
involvement of the IMF could somehow impair the independence of the ECB.

The source reckoned that support for the idea of involving the IMF
in an eventual financial aid package for Greece has “significantly
increased” in the Eurozone over the past three weeks. “We welcome that,”
he said.

While the official denied that there was already an agreement
between Germany and France regarding the IMF involvement, he said,
“We’re moving increasingly in the same direction.”

The source also saw no objections from the US administration
against aid from the IMF for Greece. The US has an interest to avoid
another “Lehman-like” catastrophe, he said.

Financial aid from the IMF is usually lower than the actual need of
the concerned country, and the remaining sum then mostly comes from
countries in the region, the official observed. “I expect that then all
Eurozone member states would contribute,” he said.

Eurozone finance ministers have already discussed how the burden
can be shared, the source said. One possibility could be to use the
percentage that each country has in the ECB’s capital to determine how
much they would have to contribute to aid for Greece. “But there are
other methods conceivable,” he said.

However, any financial aid for Greece mustn’t take the form of a
subsidy, the official stressed. “It is not about the issue if one
somehow procures more favorable interest rates [for the concerned
country], because aid would not be granted at more favorable interest
rates,” he explained.

In the case an aid package is ever needed, Germany will also push
for a discussion of how such a crisis can better prevented in the
future, the official said.

He rejected criticism that Germany was currently only pursuing
national interests in the Greek debate. Rather, the German government
sees itself as the “advocate of the rules [of the EMU] that we have
jointly given ourselves,” the official said. He stressed that an
evolution towards an European system of financial compensation is not
allowed under the EU treaties.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: MGX$$$,MX$$$$,M$X$$$,M$G$$$,MT$$$$]