EU should agree more aid for Greece – Juncker

LUXEMBOURG, June 3 (Reuters) – EU finance ministers should agree to further financial support for Greece and the private sector should be asked to share the burden, Eurogroup chairman Jean-Claude Juncker said on Friday.

Juncker, who heads the group of euro zone finance ministers, said Greece would be able to meet its debt obligations and would not have to leave the currency bloc.

“I expect the Eurogroup to agree to additional finance being provided to Greece under strict conditionality,” Juncker told reporters after meeting Greek Prime Minister George Papandreou.

“This conditionality will include private-sector involvement on a voluntary basis … I have noted with satisfaction that Greece is willing to set up a privatisation fund,” he said.

The prospect of a second bailout for debt-stricken Greece beyond an initial 110 billion euros ($160 billion) has calmed market fears of a default. Juncker said there was now no prospect of that.

“It is obvious there will be no exit of Greece from the euro area. There will be no default and Greece will be able to fully honour its obligations,” he said.

Greece’s lenders, the European Union, the European Central Bank and the International Monetary Fund, said on Friday that the next tranche of aid should be available in early July following further talks in the next weeks.

Some European politicians and economists have long argued that investors who bought Greek government bonds should share the bailout burden, perhaps by accepting a cut in the value of their holdings or by extending maturities.

Papandreou confirmed that further aid for Greece was being discussed.

“Still much is to be done and at the same time we have seen that the markets remains sceptical. This is why we are now discussing about additional financial support,” he said. (Reporting by Ben Deighton; Editing by Ruth Pitchford)