ATHENS, Greece — European socialist parties urged the EU and the IMF on Friday to lower the interest rates on Greece's and Ireland's rescue loans and to steady the continent's economy with new measures, including EU-wide bonds and a financial transaction tax.

European Socialist group leader Poul Nyrup Rasmussen said he backed an immediate drop in the loan rates by the European Union at a summit on March 25, but that conservatives leading the bloc refused to accept that.

"Our message tonight is: Lower the interest rate for Greece and Ireland. ... I think the lack of solidarity from the dominant conservatives has gone on long enough," Rasmussen said at the meeting of the Party of European Socialists, which groups together the EU's socialist and social democratic parties.

Greece is struggling to see through a second year of drastic austerity measures in exchange for a €110 billion ($154 billion) bailout loan package that rescued it from bankruptcy in May 2010. Ireland also received a bailout late last year due to massive banking-sector losses.

Rasmussen said the Socialists support calls to create a European bond that would effectively tie together the debt markets of different countries and to impose a "transaction tax" on banks and financial institutions.

"We must say that those who caused this crisis — the banks, the hedge funds, financial speculators — it's time for them to co-finance our way out of the crisis," Rasmussen said.

He told The Associated Press that studies commissioned by the European Socialists suggested that a 0.05 percent tax on financial transactions could provide the EU more than €220 billion ($307 billion) in revenue per year.

"Our belief is that the financial institutions would not leave Europe" if the tax was imposed, he said. "Europe in total is the biggest economy in the world."

Greece's Socialist Prime Minister said financially troubled Spain and Portugal could avoid resorting to Europe's bailout mechanism, if the EU provides a more comprehensive plan to rebuild market confidence.

"My belief is that Spain and Portugal should not enter the mechanism because they have done everything they are supposed to," he said. "So it is Europe's responsibility."

Papandreou said it was still unclear whether "the right decisions" would be taken.

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At the center of Europe's debate are demands for stricter budget rules and economic reforms from strong economies like Chancellor Angela Merkel's Germany pitched against pleas for more help and leniency from the currency union's weaker members.

Germany, for example, is reluctant to spend money to directly support weaker countries' bond markets, which the EU's executive Commission and the European Central Bank are pushing for.

"The problem with the Merkel pact is it's just not the instrument for the crisis," Rasmussen said. "We are very, very different. ... I don't need the Merkel pact in Scandinavia," he said. "They need it in Germany, but I doubt they need it south Europe."

Associated Press Writer Elena Becatoros contributed.

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