Cool reception from capitals to calls for extra Greek loans

(BRUSSELS) - Eurozone heavyweights Germany and France gave a cool reception Friday to mounting calls, backed by the head of the EU executive, to increase the size of a planned second Greek bailout.

Sources have indicated a potential shortfall of up to 15 billion euros ($20 billion) if Athens is to meet an EU-IMF target for debt sustainability, with banks playing hardball over a big debt write-down from their side.

A looming recession across Europe could also complicate matters for Greece and its European Union partners.

EU leaders are due in Brussels on Monday for a summit, by which time they hope to have secured a deal to wipe out 100 billion euros of Greek government debt -- but the shortfall issue could easily gatecrash the summit talks.

"If our Greek friends do their bit, we must support them," European Commission chief Jose Manuel Barroso said after preparatory talks with Belgian Prime Minister Elio Di Rupo, implying that governments would have to step in where banks won't.

Barroso argued that a messy default would signal a "major problem" not only for Greece but for the eurozone as a whole.

He refused to comment on "precise figures," with experts from the EU Commission, the European Central Bank (ECB) and the International Monetary Fund each in Athens going back over the country's books.

European economic commissioner Olli Rehn announced this week a demand for a new "adjustment" programme from the Greek government.

If governments were unwilling to increase the scale of their loans, "that would make things very difficult, not only for Greece but also for the eurozone if there was a major problem, a problem of default in Greece," Barroso stressed.

"That's our line, the Commission will hold to this line, no ambiguity."

The second bailout, initially agreed in October, was to be for 130 billion euros of public money, dependent on the write-down and Greece plausibly cutting its public debt to 120 percent of gross domestic product by 2020.

As things stand, Greece's debts are unlikely to fall below 130 percent of GDP, and splitting the difference, sources said the tab to be shared by eurozone partners would come in at between 11 billion euros and 15 billion.

Governments, though, are publicly very wary of throwing more taxpayer money at Athens.

In Brussels also for talks with EU counterparts on the EU budget long-term, German Foreign Minister Guido Westerwelle declared his opposition.

"I see no interest in speaking every week about new funds," Westerwelle said, not when "we don't know if promised reforms will really be implemented."

"You cannot overcome a crisis by making it easier to run up new debts," he added, maintaining that the public sector had "long since assumed its responsibility with considerable, unbelievable sums" of money thrown at Athens and elsewhere.

Westerwelle said the private sector had to take its share in the burden.

French European Affairs Minister Jean Leonetti also said the banks had to meet their end of the bargain.

"There is no reason to change plan," he said.

The head of the Eurogroup of finance ministers from the currency union, Luxembourg Prime Minister Jean-Claude Juncker, says the ECB also has to face facts and accept it will not get back everything it is due from Greek bonds bought on sell-on markets.

He took the view that there are "several" governments that "would love to pass the bill onto the ECB," a source close to Juncker said.