The German Chancellor Angela Merkel has welcomed the austerity measures taken by Greece to solve its financial crisis. Flanked by the Greek Prime Minister George Papandreou after talks in Berlin, Mrs Merkel said direct aid to Greece was not needed. From Berlin, here's Steve Rosenberg.

The Chancellor made it clear that Greece had not asked Germany for any financial assistance. She said she was optimistic such help would not be required. What Germany could provide, Chancellor Merkel said was solidarity and understanding. In her opinion the stability of the Euro would not be affected by problems in Greece. She went on to denounce speculation by the markets on Greece's defaulting on its debts. For his part, the Greek Premier dismissed recent suggestions in the German press that Greece should sell off some of its islands to help raise funds.