UPDATE 1-Greece to decide on EU/IMF aid within weeks-report

* PM says to decide on aid within weeks

* Says no official decision taken yet

* Sees no problems borrowing in May

(Adds quotes, details)

ATHENS, April 17 (BestGrowthStock) – Greece will decide within
weeks on whether or not to activate a European Union and
International Monetary Fund aid mechanism, Prime Minister
George Papandreou told Newsweek.

Athens will start official talks with European officials
and the IMF on Monday to clarify details on the deal which, at
an estimated 45 billion euros in the first year, would be the
largest such bailout ever attempted if Greece asks for it.

“We will have to make a decision about whether we activate
this mechanism in the next few weeks,” he was quoted as saying
in the magazine’s April 16 issue.

“We haven’t taken an official decision yet. All we’re
saying is let’s prepare so that if we have to push the button,
it’s ready.”

Investors are increasingly certain Athens will tap the aid
after a bid by euro zone leaders to flesh out its details last
week failed to rein in a spike in borrowing costs that are
complicating Greece’s attempts to cut its budget deficit.

The yield on Greek 10-year bonds closed at 7.4 percent on
Friday, three percentage points over pre-crisis levels. It
pushed the difference in yields between 10-year Greek debt and
euro zone benchmark German bonds up 15 basis points to 426,
close to last week’s euro era record of 463.

Papandreou said the aid package was not a bailout and it
would give Greece breathing space to move ahead with the
necessary reforms.

“It gives us the room to manoeuvre to make the necessary
changes to make our economy a viable one,” he said.

He also said he thought Greece would have no difficulty
borrowing on global markets next month, when Greece must
refinance 11 million euros of debt in May.

The first test will be the sale of 1.5 billion euros in
short term debt on April 20. The same day, officials will
travel to the United States to gauge appetite for a
dollar-denominated bond, although so far markets say interest
has been lukewarm.

“We will not default,” Papandreou said. “The problem is the
cost of borrowing, and how long we can sustain that. I don’t
see a problem even in May, but that doesn’t mean that we have
closed the option of using this mechanism.”

(Reporting by Angeliki Koutantou; editing by Bill Tarrant)

UPDATE 1-Greece to decide on EU/IMF aid within weeks-report