Greece preparing to tap EU/IMF aid if needed: PM

By Dina Kyriakidou

ATHENS (BestGrowthStock) – Greece is preparing to activate an IMF/EU aid plan if needed but that does not mean the country is bankrupt, Prime Minister George Papandreou said on Friday.

Struggling to exit a debt crisis shaking the euro zone, Greece asked EU partners and the International Monetary Fund on Thursday to start formal consultations on the 40-45 billion euro ($56-$63 billion) financial aid package.

“The activation of the mechanism will be decided depending on the country’s interests,” Papandreou told parliament. “We are taking all the preparatory actions required.”

Papandreou said the IMF was already participating in monitoring Athens but that did not mean Greece was insolvent.

“The IMF is already involved in this process, even today. It is in the process of monitoring Greece,” he said, answering opposition party questions. “The IMF’s involvement does not mean that the country is bankrupt.”

His government, which came to power in October and unveiled a huge budget deficit, has imposed austerity measures but Greek markets have been pounded by fears over the country’s solvency.

Papandreou said he remained committed to the drastic reforms needed to turn the country around.

“True, the measures hurt. But think of what would have happened if we had entered a state of bankruptcy and if we had not been able to borrow,” he said. “If the country had gone down, it wouldn’t have hurt the rich, it would have primarily hurt the average Greek and the weak.”

An opinion poll showed on Friday that two thirds of Greeks are dissatisfied with the performance of the socialist government, but still overwhelmingly support it over the conservative opposition.

Germany’s reservations in helping Greece, a chronic fiscal offender, and concerns about Athens’ ability to deal with its debt have raised borrowing costs and are seen forcing the government to turn to the aid.

Papandreou said he would have preferred the aid package, of about 30 billion euros from euro zone partners and another 10-15 billion from the IMF, to have been solely an EU solution.

“Could it have been more European? Yes it could have been. The involvement of the IMF resulted from an EU decision and the insistence of certain interests, the conservative European Popular Party,” he said.

Penny Stocks

(Additional reporting by Athens bureau; Editing by Ruth Pitchford)

Greece preparing to tap EU/IMF aid if needed: PM