Up to 25 billion euros in aid mulled for Greece: report

BERLIN (Reuters) - Germany's finance ministry has sketched out a plan in which countries using the euro currency will provide aid worth between 20 billion and 25 billion euros ($27-$33.7 billion) for Greece, a magazine reported on Saturday.

Citing "initial considerations" by the ministry, German weekly Der Spiegel said the share of financial aid for Greece would be calculated according to the proportion of capital each country holds in the European Central Bank.

A spokesman for the German finance ministry said he would not comment on the report, which stated that the financial assistance should take the form of loans and guarantees.

The report said all euro countries would shoulder the burden and that Germany's share in the package would amount to 4-5 billion euros, and be handled by state-owned bank KfW.

According to the German planning, the aid should be tied to strict conditions, the magazine said, adding that loan tranches should only be paid out once these are met.

Spokesmen for both the Greek finance ministry and the European Commission declined to comment on the report.

Chancellor Angela Merkel's government has so far resolutely deflected appeals to promise Greece aid despite fears that failure to help Athens could threaten the euro.

Germany in public argues that leniency would take pressure off Athens and other euro zone debtors to cut their budget deficits. Behind the scenes, lawmakers acknowledge that Berlin has prepared measures if a rescue becomes inevitable.

Merkel's position has been complicated by the fact the country is embroiled in a highly charged debate on the sustainability of Germany's welfare state.

This has helped to galvanize public opposition to Berlin funding a bailout just as her center-right coalition braces for a big test of its popularity in May, when voters go to the polls in Germany's most populous state, North Rhine-Westphalia.

TRANSPARENCY

Speaking to Der Spiegel, Greek Prime Minister George Papandreou told Germany he was not seeking aid, and criticized the Commission for failing to ensure member states adhered to the EU's Stability and Growth Pact that limits budget deficits.

"The union could in the past have more rigorously policed whether the stability pact was being observed -- with us too," he said. "In future we should allow the European statistics office direct access to individual member states' data."

"We suggested that, but not all countries wanted to have so much transparency," Papandreou said.

Greece's deficit swelled to 12.7 percent of gross domestic product in 2009, way above the EU's cap of 3 percent, and Athens needs to sell some 53 billion euros of debt this year, including at least 20 billion euros in April and May.

In case demand should falter, German lawmakers have been quietly thinking about how Greece could be helped.

A senior financial official in the ruling coalition told Reuters last week Germany was considering using the KfW to buy Greek government bonds. A separate proposal saw the KfW issuing guarantees to German banks that bought the Greek bonds.

Separately, Der Spiegel said that an internal report by Germany's financial market watchdog BaFin concluded that German banks could be seriously threatened if Greece or other countries including Spain, Portugal and Italy become insolvent.

(Additional reporting by Holger Hansen, Renee Maltezou and Bate Felix; editing by Sue Thomas)