Europe can’t help itself; faced with a financial crisis centred on Greece and other highly indebted nations, some leading members, especially Germany, keep opening their mouths when silence and action is called for.

Greece, too, doesn’t know when it is well off, as the government again tries to slither away from its responsibilities to cut spending and wear the costs of the self-inflicted near destruction of its credit rating and financial standing in the markets.

Only a day after European finance ministers agreed on a framework to help Greece financially in an emergency, Greek Prime Minister George Papandreou was pushing the line that because all Greeks had to take a cut, banks and other investors buying Greek debt should take a cut in their interest rates and the rest of Europe should subsidise Greece’s pain.

He ignored the fact that Greece had for years lied and hidden vital figures on spending, inflation, growth and the deficit, while engaging in sleight-of-hand deals with the likes of Goldman Sachs to raise money by mortgaging its future and understating its debt into the bargain, much in the way Lehman Brothers did a few years later with the so-called highly questionable Repos 105 deals.

Overnight the Greek PM trailed the International Monetary Fund option if the European Union or ECB failed to help, an approach emphasised by another example of the now endemic bone-headedness in Germany where Chancellor Angela Merkel warned against what she called “overly hasty” decisions on EU help for Greece.

Not only did she again urge caution, she said the 16-nation eurozone must have the option of expelling a member from the club if a country persistently breaks its rules. Seeing Germany, France, Italy, Portugal and Spain have been violating the 3% of GDP limit for deficits now for some time, she may come to regret that call.

Her silly remarks (made for German domestic consumption) came after European Central Bank chief Jean-Claude Trichet said in an interview that said it would be “absurd” to think that a eurozone nation could leave the bloc if it shirks its obligations.

“I have always said that I do not comment on absurd hypotheses,” Trichet told French magazine Le Point when asked, before Germany proposed the idea, whether a eurozone member could leave the single currency bloc if it is no longer able to fulfill its duties.

Greece’s government has approved austerity measures to cut its public deficit, by 4% this year, from 12.7% GDP. That will produce a larger than forecast contraction in the Greek economy this year, making it harder to make the cuts and achieve the targets. The higher interest cost for its debt raising could chew up an extra 1.6% of GDP as well.

But the Greek government wants investors to share the pain as the PM made clear at a press conference in Brussels. He said that as long as “Greece is still borrowing at an unreasonably high interest rate, over 6%,” the country will keep “all options open” while preferring an EU solution.

Bloomberg quoted him as saying that “current borrowing costs for Greece are not only an economic problem, but an ethical one at a time we are asking people to accept wage cuts”.

Greece sold €5 billion of bonds this month at a cost of more than 6%, or three percentage points more than comparable German government bonds. This will cost Greece €725 million more than it would cost Germany to borrow the same amount.

That’s why the Financial Times story this week on what Greece really wants from Europe remains the key deal. It says Greece basically wants a €25 billion revolving credit in place for several years that is guaranteed by the EU, including France and Germany (the two AAA states), so that it can borrow at lower costs than it would have to; in other words, a subsidy.

The FT reported earlier this week that Greece is seeking to cut the cost of financing its €270 billion public debt by through a €25 billion stand-by facility of loans and guarantees.

“The facility, if agreed, would be disbursed at the request of the Greek government, people familiar with the issue said on Monday.

“It is not clear at this point if Greece would have to draw on the facility or if market pressure will fall back simply because it is in place,” said one person close to the talks.

“Bankers say it is important for the Greeks to reduce their borrowing costs or cutting the budget deficit may prove extremely difficult.

“This year, for example, the Greeks have paid a rough average of 6% on the €13 billion of new bonds issued in the markets. This compares with an average of about 4.5% last year.

“An extra 1.5 percentage points on Greece’s €270 billion of outstanding bonds works out at €4 billion a year in extra interest costs — equivalent to about 1.6 percentage points of gross domestic product.”

The FT said the need for a support package is growing: “It has to roll over €8.2 billion of debt on April 20 and another €1.3 billion three days later.”

That takes the cake for bare-faced effrontery. Not only does Greece want Europe to underwrite its debt, it wants total control over how it draws down on that debt and how it uses it.

Beware of Greeks demanding open, signed cheques.