WRAPUP 2-Greek PM to meet Merkel amid signs of moves on crisis

* Greek PM to visit Germany on March 5, U.S. on March 9

* PM holds talks with Deutsche Bank CEO

* Greek bond spreads narrow, stocks edge higher

(Edits; adds U.S. visit, Spanish minister)

By Dina Kyriakidou

ATHENS, Feb 26 (Reuters) - Greece's prime minister announced plans on Friday to meet German Chancellor Angela Merkel next week as signs grow that diplomatic efforts are under way to resolve his country's debt crisis.

Prime Minister George Papandreou, who will also meet U.S. President Barack Obama in the next 10 days, told parliament he expected assistance from Greece's European Union partners, for which German backing would be vital.

He also met Deutsche Bank's (DBKGn.DE) Chief Executive Josef Ackermann, although a Greek spokesman denied the German bank was considering buying 15 billion euros in Greek bonds.

Greece wants to restore investors' confidence in its economic statistics and reassure buyers that its debt is manageable after revealing that the previous government understated the budget deficit by half. The EU has offered political support but no bailout.

"We must do whatever we can now to address the immediate dangers today. Tomorrow it will be too late and the consequences will be much more dire," Papandreou said. [ID:nLDE61P0ZO]

"We ask the EU for its solidarity and they ask us to meet our obligations. We will meet our obligations ... We will demand European community solidarity and I believe we will get it."

Investors appeared to welcome the comments, pushing the gap between yields on Greek bonds and their German equivalent -- a measure of market faith in Greece's finances -- to below 340 basis points.

Greek stocks .ATG rose 1.4 percent and traders granted the euro EUR= a reprieve after it hit a one-year low against the Japanese yen a day earlier. But many in the market expect the euro to stay under pressure because of concerns about Greece.

The Greek government said Papandreou would visit Merkel on March 9 and Obama on March 9, but gave few details. It also said little about the talks with Ackermann.

Merkel's government has resisted appeals to promise Greece aid and opinion polls show a majority of Germans oppose a bailout. But many economic analysts say Europe's largest economy will step in if it believes the euro's stability is threatened.

Media reports have suggested governments in the 16-country euro zone could offer aid worth 20-25 billion euros but the EU has not confirmed them.

FEARS OF CONTAGION

Some of Greece's EU partners fear market volatility caused by Greece will spread to other countries that use the euro and have big deficits to cover, such as Portugal and Spain.

Spanish Economy Minister Elena Salgado told Reuters there was no risk of a double dip recession in Spain and its economy would grow in every quarter of 2010.

"Just two weeks ago, two of the credit rating agencies have confirmed our rating, so investors know that Spain is a country in which they can invest with all guarantees," she said.

Investors are anxious about Greece's ability to get out of crisis and must decide whether to buy more Greek debt when it issues a new 10-year bond in the next few weeks.

"The prime worry is will Greeks have access to the sovereign debt market at any tolerable rate and that's what we remained concerned about," Chris Pryce, director of sovereign ratings at Fitch told Reuters Insider television. [ID:nWEB2797]

Greece said after a parliamentary election in October that its deficit would be 12.7 percent of gross domestic product in 2009, four times the EU limit.

It has also drawn up an EU-backed austerity plan, including tough wage and tax measures and pension reforms, to cut the deficit by 4 percentage points this year and bring it below the 27-country bloc's limit of 3 percent of GDP by 2012.

Protests and marches by tens of thousands of people crippled transport and public services on Wednesday, but Papandreou blamed the problems on the previous conservative government.

"History confirmed our worst fears," he told parliament. "Past policies make it necessary to proceed to brutal changes."

EU OFFICIAL TO VISIT ATHENS

His comments could prepare the ground for a new set of fiscal measures before a mid-March EU deadline to show results in cutting the deficit.

EU Monetary and Economic Affairs Commissioner Olli Rehn will visit Athens next week after studying a report from EU inspectors who visited Greece this week with International Monetary Fund and European Central Bank experts. [ID:nLDE61O1ED]

A finance ministry official said the inspectors anticipated Greece could cut the deficit by about two percentage points, far short of this year's target. This would mean extra measures aimed at savings of about 4.8 billion euros ($6.47 billion).

Athens is preparing a bond issue and needs to raise about 20 billion euros to cover maturing debt in April and May.

Big German lenders including Deutsche Postbank (DPBGn.DE), Eurohypo and Hypo Real Estate NUEGg.F said they would not take on more Greek debt, which could make it harder for Greece to sell bonds to resolve its crisis.

Germany's finance ministry declined comment on a media report that Berlin might buy Greek bonds through lender KfW KFW.UL Group. KfW also declined comment. (Reporting by Athens bureau; additional reporting by Paul Day in Madrid and Nick Olivari in new York; writing by Timothy Heritage; editing by David Stamp)