The European Union is ready to offer aid to Greece one day after Greek Prime Minister George Papandreou threatened to turn to the International Monetary Fund for help.

President of European Commission Jose Manuel Barroso (R) and visiting Greek Prime Minister George Papandreou attend a press conference after their meeting at the EU headquarters in Brussels, Belgium, March 17, 2010. (Xinhua/Wu Wei)

Barroso said that the instrument would be compatible with the no bail-out clause of the Eurozone and with strict conditionality.

But he said that creation of the instrument does not mean it would be activated immediately.

“Our objective is an instrument designed within the euro area, with conditions and management established by the euro area and its institutions,” Barroso said.

“We cannot prolong any further the current situation,” he said, adding “I urge the EU’s leaders to agree on this instrument as soon as possible.”

One day before Barroso issued the statement, Papandreou Thursday called for a clear aid plan for his debt-laden country and threatened to turn to the IMF for help.

Greek may not need money from the EU, but a clear aid plan would thwart speculations, Papandreou told the European Parliament here in Brussels.

“When you have that instrument in place that could be enough to tell the markets: hands off, no speculation,” Papandreou said.

He warned that if the EU could not agree on an aid plan Greece may have to turn to the IMF for help.

“We have talked to the IMF, they would have asked us for nothing more,” the prime minister said.

Papandreou urged EU leaders to make a decision at their summit next week, saying “I think it’s an opportunity to make a decision next week at the summit.”

Earlier on Monday, Eurogroup Chairman Jean-Claude Juncker said after the monthly meeting of Eurozone finance ministers that the ministers “clarified modalities enabling a decision on coordinated action and which could be activated swiftly in the case of need.”

But Juncker said the final decision on how to help Greece is up to the EU leaders, who will hold a summit meeting on March 25-26.

VietNamNet/Xinhuanet