* Papandreou to visit Germany on March 5, U.S. on March 9
* Holds talks with Deutsche Bank chief executive
* Greek bond spreads narrow, stocks edge higher
* Obama discusses crisis with Merkel, Brown (Adds White House comment)
By Dina Kyriakidou
ATHENS, Feb 26 (Reuters) - Greece"s prime ministerannounced plans on Friday to meet German Chancellor AngelaMerkel next week as signs grow that diplomatic efforts areunder way to resolve his country"s debt crisis.
Prime Minister George Papandreou, who is also due to meetU.S. President Barack Obama on March 9 in Washington, toldparliament he expected help from Greece"s European Unionpartners, for which German backing would be vital.
Obama held a call with Merkel and British Prime MinisterGordon Brown on Friday in which they discussed the Greek debtcrisis, among other issues, the White House said.
Papandreou also met Deutsche Bank"s (DBKGn.DE) ChiefExecutive Josef Ackermann, although an Athens governmentspokesman denied Greek press reports the German bank wasconsidering buying 15 billion euros in Greek bonds.
Greece wants to restore investors" confidence in itseconomic statistics and reassure buyers its debt is manageableafter revealing that the previous government understated thebudget deficit by half. The EU has offered political supportbut no bailout.
"We must do whatever we can now to address the immediatedangers today. Tomorrow it will be too late and theconsequences will be much more dire," Papandreou said.[ID:nLDE61P0ZO]
"We ask the EU for its solidarity and they ask us to meetour obligations. We will meet our obligations. ... We willdemand European community solidarity and I believe we will getit."
Investors appeared to welcome the comments, pushing the gapbetween yields on Greek bonds and their German equivalent -- ameasure of market faith in Greece"s finances -- to below 340basis points. That marked a drop of nearly 20 bps on the day.
Greek stocks .ATG rose 1.4 percent and traders grantedthe euro EUR= a reprieve after it hit a one-year low againstthe Japanese yen EURJPY= a day earlier. But many people inthe market expect the euro to stay under pressure because ofconcerns about Greece.
The Greek government said Papandreou would visit Merkel onMarch 5 and Obama on March 9, but gave few details. It alsosaid little about the talks with Ackermann.
Merkel"s government has resisted appeals to promise Greeceaid and opinion polls show a majority of Germans oppose abailout. But many economic analysts say Europe"s largesteconomy will step in if it believes the euro"s stability isthreatened.
Media reports have suggested governments in the 16-countryeuro zone could offer aid worth 20 billion to 25 billion euros,but the EU has not confirmed that.
In Washington, White House spokesman Robert Gibbs said theUnited States believed the EU could and would act appropriatelyto ensure an effective response to the crisis.
A senior U.S. official said Obama and Papandreou woulddiscuss in White House talks "a number of key issues relatingto the U.S.-Greek bilateral relationship, including regionalsecurity and economic issues." The official said the meetinghad been "timed with the prime minister"s planned travel to theUnited States."
Given international concern about Greece"s debt crisis, theleaders were all but certain to talk about it.
FEARS OF CONTAGION
Some of Greece"s EU partners fear market volatility causedby Greece will spread to other countries that use the euro andhave big deficits to cover, such as Portugal and Spain.
Spanish Economy Minister Elena Salgado told Reuters therewas no risk of a double-dip recession in Spain and its economywould grow in every quarter of 2010.
"Just two weeks ago, two of the credit rating agencies haveconfirmed our rating, so investors know that Spain is a countryin which they can invest with all guarantees," she said.
Investors are anxious about Greece"s ability to get out ofcrisis and must decide whether to buy more Greek debt when itissues a new 10-year bond in the next few weeks.
"The prime worry is will Greeks have access to thesovereign debt market at any tolerable rate and that"s what weremain concerned about," Chris Pryce, director of sovereignratings at Fitch, told Reuters Insider television.[ID:nWEB2797]
Greece said after a parliamentary election in October thatits deficit would be 12.7 percent of gross domestic product in2009, four times the EU limit.
It has also drawn up an EU-backed austerity plan, includingtough wage and tax measures and pension reforms, to cut thedeficit by 4 percentage points this year and bring it below the27-country bloc"s limit of 3 percent of GDP by 2012.
Protests and marches by tens of thousands of peoplecrippled transport and public services on Wednesday, butPapandreou blamed the problems on the previous conservativegovernment.
"History confirmed our worst fears," he told parliament."Past policies make it necessary to proceed to brutal changes."
EU OFFICIAL TO VISIT ATHENS
His comments could prepare the ground for a new set offiscal measures before a mid-March EU deadline to show resultsin cutting the deficit.
EU Monetary and Economic Affairs Commissioner Olli Rehnwill visit Athens next week after studying a report from EUinspectors who visited Greece this week with InternationalMonetary Fund and European Central Bank experts.[ID:nLDE61O1ED]
A Finance Ministry official said the inspectors anticipatedGreece could cut the deficit by about 2 percentage points, farshort of this year"s target. That would mean extra measuresaimed at savings of about 4.8 billion euros ($6.47 billion).
Athens needs to raise about 20 billion euros to covermaturing debt in April and May.
Big German lenders including Deutsche Postbank (DPBGn.DE),Eurohypo and Hypo Real Estate (NUEGg.F) said they would nottake on more Greek debt, which could make it harder for Greeceto sell bonds to resolve its crisis.
Germany"s Finance Ministry declined comment on a mediareport that Berlin might buy Greek bonds through lender KfWKFW.UL Group. KfW also declined comment.
In Washington, IMF Managing Director Dominique Strauss-Kahnsaid the EU nations wanted to resolve Greece"s problems ontheir own but the Fund was ready to help if asked.
"They want to clean up the situation themselves. ... I dobelieve they are able to do that," he said. "We will do whatour members ask us" in terms of expertise and support, headded. (Reporting by Athens bureau; Additional reporting by Paul Dayin Madrid, Nick Olivari in New York and Lesley Wroughton andRoss Colvin in Washington; Writing by Timothy Heritage; Editingby Peter Cooney)
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