Greece's finance minister said a detailed rescue plan from other euro zone nations would be the best way to soothe market fears that his country could default on debt payments, as the EU demanded answers on how Greece used complex finance deals to massage debt.
Euro zone nations pledged last week to aid Greece "if needed to guard financial stability in the euro area" — but did not say how they would help the country. Greece's debt problem has shaken the entire euro zone and undermined the shared currency.
"My guess is that what will stop markets attacking Greece at the moment is a further more explicit message that makes operational what has been decided last Thursday," at a meeting of EU leaders, Greek Finance Minister George Papaconstantinou said.
Market worries of a default have hiked the cost of Greek government borrowing in recent months and caused the euro to slide to a near nine-month low against the dollar.
Greece's credibility came under fire Monday from the European Commission, which said it wants Greece to explain by the end of February how it used complex financial deals since 2001, called currency swaps, that allegedly made its debt limits look lower.
A Feb. 1 report commissioned by the Greek finance ministry also warned of "significant debt revisions" for 2009 statistics due to swaps, debt to suppliers and state-guaranteed loans that may default.
It said some swaps are now "being done in order to transfer interest from the current year to the future, with long-term loss to the Greek state."
EU spokesman Amadeu Altafaj Tardio said such swaps weren't illegal unless the Greece was not using market rates to calculate the exchange rates used for the swaps. Greece never told the EU that it was using the swaps to mask debt, he said.
Papaconstantinou said some of the derivative contracts used in the past "were at the time legal and Greece was not the only country" using them. He said they have now "been made illegal and Greece has not used them since."
He said the government now does not want to use financing that is not approved by the EU statistics agency Eurostat.
"We do want to restore credibility," he said. "We have enough trouble as it is convincing people that our numbers are real."
The Greek government is also trying to prove that it can solve its problems on its own. It says isn't asking for a bailout and won't need one.
But Papaconstantinou said he would like to see the 16 countries that use the euro "work out a mechanism so that if necessary the mechanism will be there" for any member that cannot pay its debts.
"I think this is the logical way of addressing the issue," he told an audience of European Union policy makers at a European Policy Centre think-tank event in Brussels.
He said last week's statement was a "watershed" because it showed that "in the euro zone, no one country is alone and when it comes down to it they stick together."
He blamed financial markets for exaggerating Greece's debt worries, saying Greece's economic output is just over 2 percent of the euro area's and a default "would not ... create a problem for the euro area."
"Any country is prey and will be prey to speculative forces," he said. "Today it's Greece, tomorrow it could be another country."
Euro zone finance ministers meet for talks later Monday to discuss whether they think Greece's austerity program will be enough to reduce its massive deficit over the next three years. Ministers from all 27 EU countries then meet Tuesday.
Luxembourg Prime Minister Jean-Claude Juncker, who leads the talks, said "it will be up to the Greeks to prove that the existing adjustment program will be sufficient."
He rejected any suggestion that the debt crisis would force Greece to abandon the euro, saying "I don't think that this absurd theory of expelling Greece from the euro zone has any chance of being taken seriously."
The European Commission has already warned that it will ask Greece to do more if it can't implement promised spending cuts and tax hikes — which have already sparked protests and a sweeping public sector strike in Greece.
It wants to keep Greece on a tight rein, ordering the government to report back in mid-March to show what kind of cuts it has made. The EU could then demand tougher action.
The Greek government has promised to do everything necessary to reduce its deficit from 12.7 percent of gross domestic product last year to 8.7 percent this year — and under a 3 percent limit set by EU rules by the end of 2012.
The EU executive is also seeking the power to audit the Greek public finances following a damning report from Eurostat that said Greece falsified data to hide the extent of last year's deficit.
Greek finance ministry officials, speaking on condition of anonymity, told the Associated Press on Sunday that the government has met with most major international banks over the last months "to explore options and discuss their involvement in financing Greek national debt."
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