Martin Schulz, leader of the European Parliament's Progressive Alliance of Socialists and Democrats (S&D) parliamentary group, on Friday expressed the European Socialists' solidarity with Greek prime minister George Papandreou and his ruling PASOK government "in this difficult time for the country", in a greeting to the PASOK National Council's 11th congress, chaired by Papandreou.

Schulz stressed that Europe must decide the direction it will take, and underlined that it should not be the direction of German chancellor Angela Merkel and French president Nicolas Sarkozy.

He further said that the excessively high interest rates need to be reduced, stressing that the issue of Euro-bonds would be a very good tool in that direction, while he also backed the extension of the repayment period of the support loans of countries such as Greece.

"Why should that be so difficult," he questioned, and gave the reply that this was so because there is a lack of solidarity.

Schulz said that the euro is a strong currency, and wondered "why is it being weakened through internal squabbling in the eurozone". He explained that Europe's common currency is being weakened by the lack of solidarity "because the strong economies, such as Germany, are trying to give lessons in economy, as with the Competitiveness Pact".

He said that the EU must move in the direction of investments in order to boost the economy through the development of infrastructures, education, worker qualifications, etc.

Without a common strategy, he warned, this will not be achieved.

He acknowledged that cutbacks and improvement of fiscal finances are necessary, "but this can be achieved only if there is growth".

Schulz further said that the capitalists must make their contribution, and cited a proposal by PASOK Eurodeputy Annie Podimata for a tax on stockmarket transactions, noting the symbolic value of the proposal as it came from Greece.

He said that the Papandreou government must solve problems and burdens it inherited from preceding governments, noting that "people such as Angela Merkel do not speak about what the previous governments did", and pointing out that before the last general elections in Greece the German chancellor had fully backed the (preceding New Democracy) government of Costas Karamanlis.

"We socialists are solving problems created by others," he said.

As a German himself, Schulz said that although Germany is governed by Merkel, the country was not represented by her, and expressed hope that "the time will come when she will be a former chancellor" because "the country needs a different course".

Noting that things are very difficult, he said that "we will make every effort to help Greece come out of the crisis".

In closing, Schulz expressed his admiration for and confidence in Papandreou, noting that it is hard for a politician to not mince his words and to speak the truth, and adding that Papandreou was leading Greece in a very dignified manner and lending dignity to Greece in a very difficult time.

Schulz is in Athens for a two-day summit of the Party of European Socialists (PES) leaders that opens here later Friday.