German finance minister says no more risks of contagion in euro zone


* No more risk of contagion - Schaeuble

* Greek PM says bailout talks with lenders must finish byyear-end

* IMF says Greece must find further, targeted savings

By Michelle Martin

BERLIN, Nov 23 (Reuters) - German Finance Minister WolfgangSchaeuble said on Saturday that there were no longer any risksof contagion in the euro zone, and Greek Prime Minister AntonisSamaras stressed his country did not need a further bailout.

Schaeuble said Greece's achievements in the last 1-1/2years, which included better-than-expected growth and progressin reducing its deficit, merited respect. He also pointed to thedecline in the difference between yields on German and Greekbonds.

He said government crises and coalition negotiations nolonger posed contagion risks for the single currency bloc as awhole, without specifying which country or countries he wasreferring to.

"The euro is stable, financial markets are no longerconcerned about the future of the euro zone and there are norisks of contagion anymore," he said at a conference organisedby German newspaper Sueddeutsche Zeitung in Berlin.

Speaking later at the event, Greece's Samaras reiteratedthat his country did not need a further bailout and insteadsimply needed to fulfil the terms of its existing programme.

Athens has said it will emerge from a six-year recessionnext year and has more than doubled its forecast for the budgetsurplus before interest payments for this year.

International lenders are in the middle of their latestreview of Greece's performance on its reform targets. Posting abudget surplus before interest payments would open the way forGreece to ask for debt relief.

"I think that this is enough. We don't need something else -we don't need another programme - we just have to stick by thisprogramme," Samaras said.

After more than two months of reviewing Greece's economy,the lenders have still not agreed to release Greece's nexttranche of bailout funds as they disagree with Athens on thesize of a fiscal gap for 2014-2015 and how this will be filled.

Officials from the "troika" of lenders - the EuropeanCommission, the European Central Bank and the InternationalMonetary Fund - are due to return to the country in earlyDecember.

"I believe that what we need at this point is to finish thejob by the end of the year of getting, that is, the approval ofthe troika for the next tranche," Samaras said.

The prime minister stressed that Greece did not need moretime to reduce its debt. "At this point I'm going very fast ...I do not need time to wait," he said.

Athens faces bond payments of 1.85 billion euros ($2.5billion) in early January.

Greece said earlier this week it will post a primary budgetsurplus before interest payments, of 0.4 percent of GDP thisyear.

But under the terms of its international bailout it mustwiden the surplus to 4.5 percent of GDP in 2016. Athens has saidit will meet this target without taking further unpopularausterity measures, helped by an economic recovery and bettertax collection.

But the troika insists the country must make further cutsbecause it doubts the degree to which an economic rebound and acrack down on tax evasion can improve Greece's finances.


IMF's mission chief for Greece suggested on Saturday thatthere is room for compromise, since both Athens and its lendersagreed that across-the-board measures which would hurt thecountry's economy should be avoided.

"Further measures will be needed for 2014-2016 but they willbe on a much smaller scale than in the past," the IMF's missionchief for Greece Poul Thomsen was quoted as saying in aninterview with newspaper Kathimerini.

"We agree with the (Greek) government there should be noacross-the-board measures and that they should focus on areas ofwaste," Thomsen said.

"Across-the-board" fiscal measures are generally understoodto be fiscal measures that indiscriminately affect the entirepopulation, like tax increases or public sector pay and pensioncuts.

Speaking on Friday in a joint press conference with GermanChancellor Angela Merkel, Samaras reiterated that there would beno new wage and pension cuts in austerity-weary Greece.

Greece and its lenders have yet to settle many outstandingissues, Thomsen said, including the 2014 budget, Greece's2014-2017 mid-term fiscal strategy and a new property tax.

The troika was also pushing Greece to soften currentrestrictions on large-scale corporate firings, as well as onbank foreclosures of first homes, Thomsen told Kathimerini.

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