Greece, pressing for curbs on financial speculation that it blames for worsening the country's debt crisis, said on Tuesday the idea would be examined by the Group of 20 leading powers at their next summit.

Greek Prime Minister George Papandreou told reporters after meeting with President Barack Obama that the U.S. leader had been encouraging on Athens' effort to restrict speculators.

A U.S. official, however, offered a very measured response when asked about the call for curbs on instruments like credit default swaps, leaving unclear the degree to which Washington supported Papandreou's effort.

We have found a positive response from President Obama, which means that this issue will be on the agenda in the next G20 meeting, the Greek prime minister said after the White House meeting.

We ourselves were in the last few months the victims of speculators. Obama assured me that he considers the initiative useful, important, positive and that the United States will contribute in this direction, he added.

Canada hosts the next summit of the Group of 20 political leaders in June, although G20 finance ministers will gather in Washington in late April.

The meeting with Obama was part of a concentrated series of international appearances by Papandreou aimed at enlisting major power support and shoring up investor confidence in Greece's ability to get through its budget crisis.

A senior Greek official, speaking to reporters after the meeting with Obama, said the United States would present its own plans at the G20 to damp down financial speculation.

He said the U.S. proposals could go beyond the ban on naked selling of derivatives the European Commission on Tuesday said it would consider. Naked selling involves selling a credit default swap to a buyer who does not hold the underlying sovereign bond, which is usually a bet the bond will default.

Asked about Papandreou's call for curbs on speculation, an Obama administration official simply said that the United States was already working on a broad overhaul of U.S. financial regulation.

The president's plan would require more transparent trading and central clearing for standardized derivatives, the official said, adding that this would help regulators crack down on market manipulation and abuse.

NOT SPECULATION

Washington made plain its belief that the main source of Greece's budget problems was not market speculators.

The central task before the Greek government is to continue to move forward on their plans to restore fiscal stability and growth to its economy, the official said.

Greece was forced to take unpopular steps to slash spending after discovering the country's budget deficit had been understated by half, a discovery that spooked global investors and drove its borrowing costs sharply higher.

I see most of what has happened here as really aimed at Greek domestic opinion, said Jacob Kirkegaard of the Peterson Institute for International Economics. Coming to the U.S. is a photo op with Obama that is domestic-opinion orientated.

Athens says activities such as short selling by investors of securities they do not own inflates debt costs for countries struggling to cut deficits. Greece's borrowing costs have surged this year, although yields have declined somewhat since the government announced its fiscal austerity package.

On Tuesday, the yield spread of 10-year Greek government bonds over German bunds traded around 293 basis points, beneath a peak of more than 400 basis points reached in late January.

German Chancellor Angela Merkel said on Tuesday there were positive signs that Greece was making progress, including its recent successful government bond issue. In my assessment, Greece does not need any financial support, she told journalists in Luxembourg.

Papandreou also said he was not in Washington to seek aid.

Greek officials visited the International Monetary Fund on Monday for informal talks, but there was no indication that there had been any discussion of aid. Papandreou has suggested that seeking IMF assistance was possible if all else failed.

The IMF has remained on the fringes of the Greek crisis, sensitive to calls by European leaders that they want to deal with Greece as a member of the euro zone.

(Additional reporting by Lesley Wroughton, Caren Bohan and Jeff Mason in Washington and by John O'Donnell and Michele Sinner in Luxembourg; Writing by Glenn Somerville and Alister Bull; Editing by Padraic Cassidy, James Dalgleish and Leslie Adler)

Canada Germany Barack obama G20