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UPDATE 1-German FinMin: Greece must tackle budget woes alone

Published 12/10/2009, 12:55 PM
Updated 12/10/2009, 12:57 PM

* German FinMin says Greek situation raises concerns

* Says Greece must take appropriate action

* Says Greece must embark on consolidation road alone

(Adds quotes, background)

BERLIN, Dec 10 (Reuters) - Germany supports Greece in its budget consolidation efforts, but Athens must itself sort out its strained public finances, German Finance Minister Wolfgang Schaeuble said on Thursday.

Fitch Ratings cut Greece's debt to BBB+ on Tuesday with a negative outlook, the first time in 10 years a major ratings agency put Greece below an A grade, citing fiscal deterioration in the euro zone's weakest member.

The move has hit bank shares, bonds and the euro.

"The situation in Greece naturally raises concerns," Schaeuble told a news conference in Berlin.

"We assume that the Greek government will embark on a road to take all the necessary steps," he said, adding that it had not yet done so.

"We support Greece in its budget consolidation but it must embark on this road by itself," Schaeuble said. "There is a right to solidarity ... but on the other hand, every European country must bear the consequences of their actions."

Greece has vowed to do whatever it takes to check its vast deficit. Greek Finance Minister George Papaconstantinou on Wednesday reaffirmed his pledge to cut the budget gap from an expected 12.7 percent of GDP this year to 9.1 percent in 2010.

"Greece is in a difficult, very difficult situation and it naturally affects the euro zone as a whole. The Greeks must face the challenge of correcting the situation with great determination." (Reporting by Sakari Suoninen and Paul Carrel; Editing by Hugh Lawson)

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