European bank wants tougher cuts by Greece: report

(BERLIN) - The European Central Bank wants EU finance ministers to demand that Greece make bigger budget cuts and increase consumer taxes in return for help with its debt crisis, the Handelsblatt newspaper reported quoting a document to be debated Monday.

EU finance ministers meet in Brussels on Monday and Tuesday to discuss aid for Greece and debate its economic crisis plan.

Handelsblatt said it had obtained a document laying out ECB demands of Greece but the German daily said most ministers oppose the measures proposed.

The document said Greece's socialist government would be urged to make bigger budget cuts, increase Value Added Tax for consumers and impose an even higher tax on luxury goods and energy, Handelsblatt reported.

It said this would be the only way for Greece to meet its target of reducing its public deficit this year from 12.7 of gross domestic product to 8.7 percent. The government has said that by 2012 it will bring the deficit below three percent.

Doubts about Greece's willingness to curtail its debt have increased the cost of borrowing for the country and hit the value of the euro currency on international markets.

Ministers from the 16 countries which have adopted the euro will hold a meeting on Monday in Brussels. This is to be followed by a full meeting of finance ministers from all 27 EU countries on Tuesday.