ATHENS (AFP) - Greek Prime Minister George Papandreou on Friday signalled that Athens is preparing to request huge emergency loans from Europe and the IMF in what would be an unprecedented move by a euro nation. We are making all the preparatory moves required for a possible request, Papandreou told lawmakers in Athens, adding that any activation of the financial rescue package would have to be guided by the national interest. His comments came ahead of crucial talks in Athens with European and International Monetary Fund officials starting on Monday and as European finance ministers discussed the Greek crisis at a meeting in Madrid. The three-year loans would run into the tens of billions of euros and be granted at a preferential rate of around five percent, according to plans agreed by finance ministers from euro area countries earlier this month. The aid faces major obstacles, however, since parliamentary approval will be required in some countries and public opposition is running high in Germany, Europes biggest economy and the main potential contributor to the loans. Greece on Thursday requested talks with the IMF, the European Commission and the European Central Bank on a multi-year programme of economic policies and to clarify the terms for the possible loans, officials said. Greek newspapers reported that the loans would likely be conditional on further budget cutbacks, including wage cuts in the private sector, a cap on pensions and the closure of some public services and state companies. The time for talking is over. The time for painful reality is upon us, the Kathimerini daily said in an editorial. The political world has to start preparing public opinion, it said. Eleftherotypia said the bailout could be medicine or poison, while Ta Nea said it was a nightmare package that would cut salaries and pensions. European finance officials meeting in Madrid meanwhile sought to play down the potential for any immediate request for the aid from Greece. Greece has taken the first steps, but its up to them to continue, Spanish Finance Minister Elena Salgado. Jean-Claude Juncker, head of the Eurogroup of finance ministers, stressed that Greece had not yet made any formal request for aid. He also spoke of the importance of setting up a permanent mechanism for extending emergency loans to eurozone states in debt trouble. Greeces 15 eurozone partners have said they are prepared, if asked, to provide this year 30 billion euros (41 billion dollars) in loans, with another possible 15 billion euros available from the IMF. The bailout for Greece, which has the highest budget deficit in the euro area, would be the first time a eurozone member has to be rescued in this way. Analysts have said the debt trouble afflicting Greece and some other European states will hurt investor confidence in Europe. The euro has been hit in recent months by fears of a possible Greek debt default, with the European single currency trading at 1.3556 dollars during trading in London on Friday, compared with 1.3574 dollars late on Thursday. The situation concerning Greece continues to undermine the euro, said Stuart Bennett, an analyst with French bank Credit Agricole. The yield or borrowing rate on Greek 10-year bonds meanwhile rose sharply to 7.251 percent compared with 7.123 percent late on Thursday.