Update 4: Merkel: Greece Doing Its Homework With Big 1st Step 9  MAR   --Adds a comment on urgency of returning to fiscal consolidation in EMU LUXEMBOURG - Fiscally troubled Greece has taken a major first step towards addressing its financial mess, German Chancellor Angela Merkel said Tuesday. --Adds a comment on urgency of returning to fiscal consolidation in EMU LUXEMBOURG (MNI) - Fiscally troubled Greece has taken a major first step towards addressing its financial mess, German Chancellor Angela Merkel said Tuesday. Speaking at a press conference alongside Eurogroup head Jean-Claude Juncker, Merkel said, "we naturally know that...with respect to the euro and its stability we are facing serious challenges." She asserted, however, that "Greece has done its homework in an initial big step." She called Greece's austerity plan "a demanding program" that will "require important political steps." Merkel reiterated that Greece had not requested financial aid from Germany. She said recent developments regarding Greece have been "relatively positive" -- in particular, the successful issuance last week of Greek debt in a "distinctly overbid" auction. Merkel stressed that a proposed European Monetary Fund, which has been floated in the media this week, would require an EU treaty change and is thus too long-term a project to be of use in the current case of Greece. Juncker also noted that such a fund could not be a short-term solution. Merkel said the creation of a new monetary fund in Europe could not be allowed "to create the impression that the Stability and Growth Pact is no longer valid." The establishment of such a fund would require that "many, many issues be clarified," she added. Asked why Europe would even need its own monetary fund, Merkel responded by noting that the Eurozone is "a region that has its own currency, a common currency, that is not in a position to react sufficiently to all the cases that arise." She added: "If we want to have our own currency, we should consider this possibility" of a common European reaction when necessary. Merkel immediately emphasized once again, however, that pursuing the idea "should under no circumstances whatsoever weaken the Stability and Growth Pact." She noted that the Pact is for all EU members, not just the single currency bloc. "For the Eurozone it is especially important, but the impression mustn't arise that whoever is not in the Eurozone" needn't worry about the state of his fiscal affairs, she said. "I think the discussion concerning Greece shows every member state of the Eurozone that we have to take seriously [the fact] that we must return quickly to a consolidation path," Merkel said. Merkel said that the talk of a European Monetary Fund should not be taken to mean that the International Monetary Fund would become "internationally superfluous. On the contrary." The IMF will continue to be necessary, she assured, "but to be permanently dependent on the IMF should not be our ambition, I believe." With regard to revelations that the Greek data used to gain entry to the Eurozone were highly imperfect, Merkel said that while the need for verifiable statistics was less apparent in 2005, "we must say today in retrospect that it is important that figures can be verified." Eurostat's ability to check data should thus be reinforced, she urged. "We are in agreement that we also have to suppress financial speculation," Merkel said. Commenting on a proposal by Greece, Germany, France and Luxembourg to rein in credit default swaps, she said the goal was to "adopt an initiative that curbs speculation without entirely forbidding the instrument as such." With regard to financial market regulation generally, Merkel said, "we naturally have a great deal of work in front of us." She added: "It is above all a matter of coherently -- that is jointly worldwide -- implementing the G-20 resolutions." --Frankfurt newsroom, +49-69-720-142; dbarwick@marketnews.com [TOPICS: M$$CR$,MGX$$$,MT$$$$,M$X$$$,M$G$$$] 3/9/2010 8:16:00 AM