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UPDATE 1-Italy "totally backs" EU help for Greece-Berlusconi


BOLOGNA, Italy, March 21 (Reuters) - Italy is "totally in favour" of EU help for Greece, Prime Minister Silvio Berlusconi told Reuters on Sunday, in the latest sign of divisions within the euro zone over what to do about the Greek debt crisis. "We are absolutely in favour," Berlusconi said, when asked whether Italy thought that the EU should help Greece. Speaking on the sidelines of an election rally in Bologna, he said it was too early to say whether the Greek debt crisis will be the focus of this week's EU summit in Brussels. "We have not discussed this yet," he said. Earlier on Sunday, German Chancellor Angela Merkel said in a radio interview Greece did not need any financial support and European leaders should not make the question of aid to Athens a focus of their March 25-26 summit. Elsewhere, OECD Secretary General Angel Gurria said in a Greek newspaper interview combined support for Greece from the European Union and the IMF would be the best way to help the over-borrowed country deal with its debt crisis. Italy's debt-to-GDP ratio is similar to that of Greece. It is projected to rise to 117 percent this year, compared to 120 percent for Greece. However, its budget deficit stood at 5.3 percent of GDP in 2009 -- above the EU's 3 percent ceiling but well below Greece's 12.7 percent level -- meaning Italy has so far avoided the kind of pounding by financial markets that has hit Greece over the state of its public finances. Italy has long been considered one of the weak links in the euro zone, but it fared better than many in Europe during the financial crisis thanks to low household debt and domestic banks' conservative lending practices. (Reporting by Stephen Jewkes; Editing by Hans Peters) Keywords: GREECE EU/ITALY (silvia.aloisi@thomsonreuters.com; +39 06 8522 4392, Reuters Messaging: silvia.aloisi.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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