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Germany affirmed Greece's austerity programme "ambitious and sustainable"

Chancellor Angela Merkel is confident that the austerity package adopted by the Greek government will keep the euro stable. Now the measures must be put into practice. The International Monetary Fund (IMF) and the EU Commission will be monitoring progress. On these terms, Germany is willing to provide assistance.

"I believe this is the only way to restore the stability of the euro," said Angela Merkel on the sidelines of the climate change conference in Bonn. "The austerity package is very ambitious." A long and difficult road lies ahead of Greece, but there is no other way.

Angela Merkel once again underscored the importance of getting the International Monetary Fund involved. The European Central Bank and the IMF negotiated the deal with Greece.

Legislation expected by Friday

If the finance ministers of the euro-zone approve the rescue programme on Sunday, Germany is prepared to put it into practice, declared Federal Finance Minister Wolfgang Schäuble at the start of the meeting of euro-zone finance ministers in Brussels. "We have a good chance of getting the required legislation adopted by Friday," announced the minister.

This year alone Germany will provide about 8.4 billion euros in loans. "It is our job to defend the stability of the euro-zone as a whole. The better we do our job, the better it will be for all Europeans and thus also for everybody in Germany," said Wolfgang Schäuble.

Greece's government has undertaken vis à vis the European Union and the International Monetary Fund (IMF) to implement a radical austerity programme. That is the precondition for loans intended to prevent the Greece defaulting on its debts. By the end of 2014 Greece's public deficit is to be slashed from 13.6 percent of gross domestic product (GDP) to three percent. This would put Greece within the limits of the Maastricht Treaty. To make this possible the Greek budget will have to make savings of 30 billion euros by 2013, announced Greek Finance Minister Giorgos Papakonstantinou. The IMF, the EU Commission and the European Central Bank will review progress every three months. Some of the planned savings involve axing the 13th and 14th monthly salaries of public sector employees, and cutting old age pensions. Value added tax (VAT) will be raised from 21 percent to 23 percent.

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