Greece told to ensure ’solid austerity plan’

Dutch finance minister says there will be intervention, but no bail-out of Greece.

The Netherlands today warned Greece at a meeting of eurozone finance ministers not to expect “a free ride to cheap loans” as part of any EU co-ordinated measures to help it out of its financial woes.

Dutch Finance Minister Jan Kees de Jager said that Greece had “to ensure a solid austerity plan” before any other aid is offered by the other members of the eurozone.

“It’s possible we will take measures in a co-ordinated way…but there will be no bail-out, because a bail-out is also forbidden in the [EU’s] treaty,” de Jager said.

Finance ministers from the 16 eurozone member countries were discussing precise measures to support Greece in case it needs extra help to finance its debts on capital markets.

De Jager said that the EU was likely to agree to offer Greece a mixture of bilateral loans or financial guarantees if the Greek government needed such assistance.

“There is already a basic understanding as to the mode of intervention,” he said. “Loans or guarantees, but nothing that will cost us money.”

Greece is struggling to reduce a huge deficit and uncertainty about its ability to reduce its debts is making it hard for the country to refinance maturing debt on the financial markets.

Finance ministers will also make a first assessment of Greece’s progress in improving its public finance based on two progress reports – one drawn up by the Greek government, the other by the European Commission and the European Central Bank.

Olli Rehn, the EU’s economic and monetary affairs commissioner, told reporters going into the meeting that Greece’s budget cutting efforts were “on track” to meet the goal of cutting its deficit by four percentage points this year.