Merkel in talks on crisis plan for Greece: reports

(BERLIN) - Chancellor Angela Merkel held late-night crisis talks with senior government figures to prepare a plan B if Greece needs a bailout, German newspapers reported on Wednesday.

The talks on Tuesday evening saw the chancellor discuss with Foreign Minister Guido Westerwelle and others possible rescue measures for Greece, the mass-circulation Bild daily said, citing unnamed government sources.

With Greece set to announce later on Wednesday additional austerity measures to cut its ballooning budget deficit, they agreed, however, that first and foremost it was up to Greece to find its own way out of the crisis, Bild said.

Business daily Handelsblatt said meanwhile that the meeting followed irritation among her coalition partners, Westerwelle's Free Democrats (FDP), that it was not sufficiently informed about Berlin's intentions.

There is also disagreement between Merkel's Christian Democrat (CDU/CSU) bloc and the FDP on whether possible aid should be included in Germany's budget plans, Handelsblatt said.

As Europe's biggest economy, Germany is widely seen as first in line for any bailout of fellow eurozone member Greece. But with such a move deeply unpopular among voters, Merkel has stuck to her guns that no such move is on the cards.

On Sunday Merkel said "there is absolutely no question of it".

Merkel told ARD public television: "We have a (European) treaty under which there is no possibility of paying to bail out states in difficulty."

She said: "Right now we can help Greece by stating clearly that it has to fulfil its duties." Merkel added that Greece had to "show great courage" in order to cut its budget deficit and debt and restore its "lost credibility".

Greek Prime Minister George Papandreou was due to hold talks with Merkel in Berlin on Friday.