ATHENS, Greece – GREECE said yesterday that the option of seeking help from the International Monetary Fund had been “put to one side” in the hope that fellow European countries will this week overcome a political stalemate and agree on support measures.

Greece has in recent weeks warned it may ask the IMF for financial aid, which would be an embarassing setback for European political union, if it does not get any concrete support from EU leaders at a summit Thursday. IMF involvement has become a divisive issue, supported by a German government adamantly against giving money to Greece and opposed by EU officials who would like an internal solution.

But on yesterday, a Greek official played down the threat.

“The IMF is one of many options which we have put to one side. We are in Europe, we want to stay there, and we will stay there,” government spokesman George Petalotis said.

In Berlin, a German government official said several EU countries — supporting a tough line by Germany — now appeared to be unopposed to IMF involvement in providing financial support. The official asked not to be identified, citing no direct involvement in the issue.

Greece has around ¤20 billion (US$27.1 billion) of debt maturing over the next couple of months and has repeatedly said it wants to avoid paying sky-high premiums to raise money from international bond markets. It has announced a harsh ¤4.8 billion austerity plan designed to bring down its massive deficit and persuade financial markets it can deal with its debt crisis.

But markets have so far been unconvinced and European Union leaders appear split on the issue of Greek support ahead of Thursday’s summit, leaving Greece to face borrowing

costs that are double those

of Germany’s.

Finance Minister George Papaconstantinou insisted Athens does not want a cash bailout, but said Athens hopes a commitment of support from the EU will help lower borrowing costs.

“I want to make something very clear: Greece has not asked funding from anyone. We know very well that the problems of Greece are our own problems,” he said during a financial conference in Athens, adding that “the way to borrow at good rates is for us to faithfully follow our (austerity) programme.”

The government has said that unless it can borrow at more reasonable rates, it might have to turn to the International Monetary Fund for help. It has said that the outcome of the EU summit in Brussels will be crucial.

Athens is seeking details of a plan for help should it become necessary, in order to convince markets that it will not be allowed to default. Such a blueprint could boost market confidence and therefore reduce Greece’s borrowing costs.

Papaconstantinou also said he looked forward to “positive outcome” in Brussels, but added: “Regardless of this outcome, Greece will be totally able to continue borrowing without difficulty … Greece is not coming to this debate as a beggar, under any circumstances.”

German reluctance to assist Greece has raised the chances that Athens could seek alternatives. French and Luxembourg politicians said Monday that EU nations are now discussing a combination of bilateral loans from individual eurozone countries who want to contribute — together with IMF aid for Greece if required.

Greece has ordered major spending cuts and an overhaul of the tax system, promising to slash its budget deficit from an estimated 12.7 per cent of economic output in 2009 to 8.7 per cent in 2010.

Unions strongly oppose the austerity measures which have cut civil servants’ pay and hiked taxes Protesting firefighters marched though central Athens, while civil servants also staged a downtown rally later yesterday. Lawyers also walked off the job for the rest of the week, objecting to their being included in professions obliged to pay Value Added Tax.