Jan. 11 (Bloomberg) — The IMF will send a team to Greece tomorrow after its government requested technical assistance in tackling the euro-area’s largest budget deficit.

“On request of the Greek authorities, a staff team from the International Monetary Fund will visit Athens starting Jan. 12 for about a week to explore possibilities for technical assistance from the IMF in the coming months on pension reform, tax policy, tax administration and budget management,” a spokeswoman for the Washington-based lender said in an e-mailed statement today.

The mission is “within the context of the regular surveillance that the IMF provides to its membership,” according to the statement.

Greece’s economic plans are under scrutiny as the country attempts to convince the European Union and investors that its plan to tame the EU’s largest deficit is credible. EU and European Central Bank officials were in Athens last week to vet the government’s three-year stability pact, an outline of how Prime Minister George Papandreou aims to reduce the shortfall from 12.7 percent of output in 2009 to less than 3 percent by the end of 2012.

The plan will be discussed at a Cabinet meeting by the end of the week, Papandreou said yesterday. Papandreou also plans to hold a news conference this week to outline the government’s priorities for the year, he said.

Bailout Speculation

Greece last week rejected speculation that it will need a bailout to tackle the deficit. The IMF, which has moved to shore up economies from Hungary to Pakistan over the past 18 months, is “taking a close look” at Greece’s policies “and forming an opinion about their likely impact,” John Lipsky, the IMF’s first deputy managing director, said last week. Greece is an IMF member in “good standing,” Lipsky said.

Finance Minister George Papaconstantinou will give details this month to the European Commission on how Greece will meet its deficit-cutting pledges as he seeks to avoid possible penalties under the EU’s excessive-deficit procedure.

Papaconstantinou has pledged to cut the deficit to 8.7 percent of gross domestic product this year and below the EU’s 3 percent limit by the end of 2012, a year earlier than the original plan. The widening deficit prompted Fitch Ratings, Standard & Poor’s and Moody’s Investors Service to lower Greece’s creditworthiness last month, fueling concern about a possible default.

Bonds Decline

The rating cuts and default concerns contributed to a slide in Greek bonds in December. The premium investors demanded to buy Greek 10-year government debt over comparable German bonds widened to 276 basis points on Dec. 21, the widest since March 17. That gap narrowed to 217 basis points today from 220 yesterday. A basis point is 0.01 percentage point.

Greece’s deficit has prompted speculation from some investors that the rest of the EU would save the country from default if such a move were necessary. The EU will support Greece’s efforts to tame the deficit, Spanish Prime Minister Jose Luis Rodriguez Zapatero, who holds the EU’s rotating presidency, said last week in Brussels.

How far support from the EU or ECB would go remains unclear. ECB Executive Board member Juergen Stark said in a Jan. 6 interview in Italian newspaper Il Sole-24 Ore that “markets are deluding themselves” if they are counting on a bailout.

The Brussels-based commission will make a recommendation on the Greek deficit reduction plan to EU finance ministers, who will likely announce their final ruling at a meeting in Brussels on Feb. 15-16.

To contact the reporter on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net