UPDATE 1-Merkel: rescue fund not to weaken EU budget rules

(Adds details, quotes)

By John O’Donnell and Michele Sinner

LUXEMBOURG, March 9 (BestGrowthStock) – German Chancellor Angela
Merkel said on Tuesday a possible new fund to support euro zone
countries that run into financial problems would not weaken
European Union rules on budget discipline.

Speaking after a meeting with Luxembourg Prime Minister
Jean-Claude Juncker, she said any European monetary fund that
emerges from discussions should be seen as a last resort and
Juncker said it would not be a solution for Greece’s problems.

Merkel, however, noted positive developments in Greece,
saying its recent bond issue was successful, even if the country
had a long way to go to overcome its budget deficit and debt
problems. The country did not need support, she said.

“In my assessment, Greece does not need any financial
support,” Merkel told journalists.

“Greece has won some trust back through the steps taken by
its government,” she said. “I see the development relatively
positively and that was demonstrated by the placement of the
Greek bond, which was substantially oversubscribed.”

Juncker echoed those sentiments, saying Greece’s latest
austerity plan, which involves deep cuts to public sector wages
and new taxes, should be enough to convince financial markets
that the country can emerge from its problems.

At the same time, he said everything possible needed to be
done to prevent speculation against Greece and its debt market.

“I am strongly convinced that Greece will not require help,”
Juncker said. “The Greek government’s programme will be strong
enough to eliminate any element of irrational behaviour in
financial markets.”

Money

(Writing by Marcin Grajewski, editing by Luke Baker and Dale
Hudson)

UPDATE 1-Merkel: rescue fund not to weaken EU budget rules