Greece needs solidarity from Europe, not money: Greek PM

BUDAPEST, March 16 (Xinhua) -- Greek Prime Minister George Papandreou said on Tuesday that Greece needed support from Europe rather than financial aid.

Hungarian Prime Minister Gordon Bajnai (R) and his Greek counterpart George Papandreou attend a news conference after their meeting in Budapest, Hungary, March 16, 2010. (Xinhua/Dani Dorko)

Speaking in Budapest, Hungary, after meeting Hungarian Prime Minister Gordon Bajnai, Papandreou said that Greece was taking necessary measures to overcome its current economic problems but needed "breathing space" so that the measures could have "oxygen to survive."  

Greece needed immediate help from the EU, Papandreou said, but he stressed that "we are not asking for money, rather a safety net for our reform package." The Greek measures aim to cut its budget deficit from 12.7 percent to 8.7 percent in 2011, and 4 percent by 2012.

He proposed an EU instrument of "solidarity" that would intervene in the markets so that Greece could borrow at rates similar to other countries in the eurozone and not too expensive for the country in the medium or long-term.

Papandreou said that beyond the short-term, Europe needs new financial and economic architecture such as a European Monetary Fund or eurobond loan facilities to combat financial and market instability.

On Monday, finance ministers of the Eurogroup endorsed the austerity measures taken by the Greek government and agreed in theory to help Greece if needed but offered no bailout plan.

Hungarian Prime Minister Bajnai said, "Europe should follow an all-for-one and one-for-all philosophy, and show solidarity to Greece as it showed to Hungary in 2008."

Hungary received a 20 billion euros standby loan from the IMF, World Bank and the EU in 2008 which, Bajnai said, "built a dam against speculation and restored confidence in the country." Hungary's state budget deficit is now one of the lowest in the European Union.

The Hungarian crisis management model of austerity measures showed that "help is sometimes required from outside, although each country should also do its own homework and show individual responsibility," Bajnai said.