Euro in majority formidable proviso given launch - Merkel

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BERLIN, Feb 28 (Reuters) - Europe"s single currency projectis facing its toughest period since its launch over a decade agoand it is essential that Greece tackle the roots of its troublesto restore confidence, German Chancellor Angela Merkel said.

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In an interview with public television station ARD onSunday, Merkel also stressed that no decisions had been taken onproviding financial assistance to Greece, which is under acutepressure to reduce its debt mountain and bloated deficit.

"The euro is certainly in the most difficult phase since itwas created," Merkel told ARD in the interview, which will beaired later on Sunday.

"And that"s why it"s so important that we"re conscious ofthe fact that, on the one hand, it"s our common currency but onthe other hand of the need to really tackle the causes of thetroubles at their roots," she added.

"And at the roots are the high Greek deficits and lostcredibility. That"s why I"m very grateful that the Greekgovernment is planning very couragous savings measures and othermeasures to improve the deficit situation."

Merkel brushed aside media reports that the Germangovernment has been quietly setting aside provisions in its 2010budget for possible aid to Greece.

"That is definitely not the case. We"ve got a treaty thatdoes not include any provision for bailing states out, to helpthem out of a jam. We can best help Greece at the moment bymaking clear that Greece has to do its own homework, just likeit is doing at the moment."

She said the European Commission was monitoring Greece toensure it took the necessary steps and that no further decisionson aid had been taken.

"There have been absolutely no other decisions taken. Iwould like to say that quite clearly," Merkel said. "Greece hasto do what"s necessary for Greece. But that is also importantfor all of us."

Merkel repeated her view that the European Commission, European Central Bank and International Monetary Fund needed toendorse the Greek consolidation measures.

"I"ve also said that there have to be assurances now thatthe EU Commission, the ECB and the IMF are convinced that theGreek consolidation and savings programme is designed so thatthe problems are really solved," Merkel said.

(Reporting by Matthias Sobolewski; writing by ErikKirschbaum; editing by Noah Barkin)

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