George Papandreou, Greek prime minister, vowed on Friday to put aside the political cost and take what steps were necessary to lift the country out of its debt crisis, preparing the public for more belt tightening.

…Mr Papandreou said Greece did not want other countries to pay its public debt but expected a strong show of support from its EU partners.

This raises the possibility that the government may try to surprise the markets by going for a bigger fiscal package of tax rises and spending cuts. If that was the case, Greece could announce the extra measures earlier than expected, by the end of Friday.

Bloomberg, meanwhile, confirmed earlier speculation that Germany’s KfW might form one prong of any pan-European aid to Greece:

Feb. 26 (Bloomberg) — Germany is considering buying Greek bonds through state-owned lender KfW Group, German lawmakers said today.

KfW is preparing measures that are part of a European plan to grant Greece as much as 25 billion euros ($34 billion) in aid should the need arise, said four lawmakers, who spoke on the condition of anonymity because the information is confidential.

KfW’s purchase of Greek bonds, backed by German government guarantees, would be an emergency measure as it risks inviting investors to speculate against other euro region countries, the lawmakers said. No decisions have been taken yet, they said.

Rival newswire Reuters promptly took the Bloomberg story to the German finance ministry, only to be told:

That’s not a source we will react to.

Will someone get a grip here?

Related links:
Greece’s austerity plans: not enough? – FT Alphaville
Unleashing the forces of Hellas – Reuters Macroscope
Let’s throw a concert for Greece – FT Alphaville
Delicious Greek ironies – Money Supply