Schaeuble says any EU aid would be for "most extreme" cases

March 20, 2010 7:08 PM EDT

German Finance Minister Wolfgang Schaeuble said only the most extreme circumstances could justify a bailout of a European Union state from within the union, and any such aid would have to be delivered bilaterally.

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Responding to comments from European Commission President Jose Manuel Barroso about coordinated help for Greece, Schaeuble told the Bild am Sonntag newspaper there was no joint mechanism for the EU to assist a member state.

"There is no joint instrument for EU help," Schaeuble said in comments released on Saturday ahead of publication. "So only in the most extreme case could bilaterally coordinated, voluntary help come into question. But Greece has said itself it does not need this."

EU leaders will discuss the aid issue in Brussels next week after Greece said it could not deliver promised deficit cuts if its borrowing costs remained so high and that it might have to seek IMF help.

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Greek Prime Minister George Papandreou said on Saturday the country had taken the necessary steps to tackle its fiscal crisis and would not default on its debt obligations.

Barroso on Friday urged EU member states to agree a standby aid package to Greece after Athens said it could turn to the IMF for help. He said the 16 countries that share the euro currency should be ready to make coordinated bilateral loans to Greece.

Schaeuble also said that Greece, which has debts that are nearing 120 percent of gross domestic product, has access to help not only from the EU but also from the IMF.

"Greece, as a member of the IMF, has access to help from the IMF," he said.

(Writing by Erik Kirschbaum; editing by John Stonestreet)