EU develops Greece plan

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The EU has developed a set of options to help Greece overcome its financial crisis, which has unsettled the euro currency and markets globally, officials say.

But Athens will have to arrange for possible loan guarantees with individual EU governments, they say.

"There are intensive consultations on a bilateral basis in case Greece needs support for a special loan guarantee that a number of countries could come to provide," Cristina Gallach, spokeswoman for the Spanish presidency of the 27-nation EU, said on Saturday.

Gallach emphasised that Athens has said it will not need any such help, but that the EU must be ready "just in case Greece comes and says we need a bailout".

Technical work has been going on for several weeks to prepare a set of options on how to assist the Greek government carry out its austerity program, which is designed to gradually cut the country's massive budget deficit, said Amadeu Altafaj Tardio, spokesman for the EU Economic Commission.

He did not elaborate on the details, but said the options will be submitted to European financial and economic ministers who will meet next week.

Athens has pledged to slash its budget deficit from an estimated 12.7 per cent of gross domestic product in 2009 to 8.7 per cent this year - cutting the annual shortfall from 30.9 billion euros ($NZ62.15 billion) to 22.5 billion euros.

EU Economy Commissioner Olli Rehn has also said on several occasions that the EU is prepared to propose a European mechanism for co-ordinated action if requested by Greek authorities.

Greece says it is rapidly adopting EU-proposed financial reforms, and that the majority of those recommendations have already been implemented.

On Friday, Athens said it had exceeded its deficit-cutting targets in January and February.

Last week, the government toughened its austerity measures, with wage cuts and tax hikes worth an extra 4.8 billion euros in savings, in an effort to ease a debt crisis that has unsettled the euro currency and markets globally.

The European Commission is receiving help from the European Central Bank and International Monetary Fund to monitor Greece's economy, and has set a March 16 deadline to show improved finances.

- AP