Greece wants a European solution to its debt crisis and expects positive results from a European Union summit on March 25-26, Finance Minister George Papaconstantinou said on Tuesday.

Germany and its EU partners are in disagreement over financial support for Greece, whose debt load is seen hitting 120.4 percent of gross domestic product (GDP) this year. On Monday Chancellor Angela Merkel continued to rebuff calls for a support deal this week.

Greece is not going to the EU summit as a beggar. There must be a political mechanism to ensure the stability of the euro zone and support the efforts made by every country, Papaconstantinou told an investment conference in Athens.

We want a European solution, he said.

Merkel, facing opposition in Germany to any bailout for Greece, has said there is no need to discuss an aid mechanism at the summit starting on Thursday since Athens has not sought help and that aid would only be a last resort in a case of insolvency.

Papaconstantinou would not go into details regarding the shape financial support could take.

The worst thing you can do before a summit is to make predictions and scenarios, he said.

He reiterated the government's position that Greece faces no problem funding its debt via financial markets but that it wants to do so at lower borrowing costs.

Greece is paying about twice the rate Germany pays to refinance maturing debt.

The premium investors demand to hold Greek government debt rather than euro zone benchmark Bunds tightened after Papaconstantinou's comments. The Greek/German 10-year bond yield spread narrowed to 330 basis points from around 344 bps at Monday's settlement close.

We want to play by euro zone rules. Greece has full access to financial markets as it proved with its recent 10-year bond sale. Obviously, we would like the spreads to fall but I believe this will gradually happen as the stability program is implemented, Papaconstantinou said.

Papaconstantinou reiterated data released two weeks ago showing that in the first two months of the year the central government deficit narrowed by 77 percent, with revenues increasing 13 percent and spending falling by about 10 percent.

Does this mean this very good trend will continue over the next months? Nothing is certain but we are starting from a good base, he said.

The figures, which include a one-off corporate levy cashed in the first two months of the year, refer to the central government deficit, not the general government shortfall measured under euro zone rules. They therefore do not offer a complete picture.

The general government deficit includes hefty spending areas such as welfare and pension payments.

(Reporting by Harry Papachristou; Writing by George Georgiopoulos and Ingrid Melander; Editing by Ruth Pitchford)

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