Merkel to offer no aid to Greece at Friday meeting

BERLIN, March 3 (Reuters) - German Chancellor Angela Merkel said she would offer no aid to Greece at talks with Prime Minister George Papandreou on Friday but welcomed his cabinet's new austerity measures as an important step.

"We welcome the measures the Greek government has today agreed. It is an important step in realising the goal of making savings of 4 percent," she told a group of journalists in Berlin.

"It is a very important sign to strengthen market confidence again in Greece and also in the euro," she said, adding she would discuss the implementation of the new measures at Friday's meeting with Papandreou.

"I want to say clearly that it is not about aid measures for Greece on Friday but about good relations between Germany and Greece," Merkel said, adding there was no alternative to Greece "doing its own homework".

Greece earlier announced 4.8 billion euros in new austerity measures to try to tackle its bulging budget deficit. It was responding to pressure from the European Union and markets.

Merkel and other top German politicians have been reluctant to offer Greece aid, not least as polls show most Germans oppose the idea of taxpayers' money going to bail out Athens.

However, some commentators are starting to accept Berlin may have to intervene to save the euro. Germany's BDI industry association said earlier Germany and France may have to offer help to Greece to save it from bankruptcy [ID:nLDE6220JF].

Behind the scenes, talks are taking place among euro zone governments on possible mechanisms to support Greece if necessary, EU sources say. Germany would have to be involved.

German Finance Minister Wolfgang Schaeuble said in a statement the Greek cabinet's decision was a move in the right direction and deserved respect.

"The Greek partners are showing their responsibility for Europe and the common currency," he said.

"What's decisive now is that Greece quickly and fully implements these austerity measures. Market confidence should be significantly strengthened as soon as that happens and Greece should be able to refinance on capital markets."

He added this was very important for the euro's stability.