German Chancellor Angela Merkel has tried to calm fears that her government will block aid to Greece. But she told reporters in Berlin that Greece must produce a credible plan to reduce its deficits.
'I say quite clearly. Germany will help, if the corresponding pre-conditions are met. That will take a few days,' she said. On Friday, Greece asked for a rescue plan from the EU and International Monetary Fund to be activated.
Ms Merkel said negotiators from the International Monetary Fund and the European Commission must thrash out with the Greek government a 'sustainable, well worked-out' plan to get the country's spiralling deficits under control.
She said she had 'faith' in the talks but emphasised that it would take a few more days before the full details of the programme were known.
With an eye on a key regional election on May 9, however, the chancellor said she could 'understand the concerns' of the majority of Germans who are opposed to bailing out Greece.
'If Greece is ready to accept tough measures - and not just for one year, but for several years - then we have a good chance to keep and secure the euro as a stable currency for us all,' she said.
Earlier, the Commission said it was not in a position to say when talks on triggering the EU-IMF aid package would end. 'There is no deadline,' he said of the talks.
Meanwhile, the rate Greece must pay to borrow for 10 years rose above 9% today for the first time since it joined the euro zone in 2001. Analysts said the jump in the interest rate, or yield, reflected uncertainty about how the EU-IMF rescue would work and if it would be enough.
The yield or rate of return on benchmark Greek government 10-year bonds surged today to almost 9.5% from 8.68% on Friday. The rate had hit a previous record high of close to 9% on Friday. Greece now has to offer more than double the rate the euro zone benchmark country Germany needs to offer to raise new funds.
Dealers said hardline comments from Germany on the tough conditions that will be set for any aid deal, and continuing delay in specific terms, allows the market free rein to trade down Greek debt.
On Friday, after months of uncertainty, Greece called on the EU and the IMF to activate a rescue deal worth about €45 billion, which includes emergency loans at about 5%.
The Greek issue dominated weekend IMF and Group of 20 meetings in Washington, with officials trying to nail down the details well before May 19 when some €8.5 billion of Greek debt falls due.
