Greece will not restructure debt – finmin

ATHENS, May 29 (BestGrowthStock) – Greece will not restructure its
debt and will not need more cuts to achieve fiscal targets set
in the emergency funding programme it agreed with the European
Union and the IMF, its finance minister told a Sunday paper.

The debt-laden country has been offered a 110 billion euro
($134 billion) bailout to avoid defaulting on its debt and in
return promised to cut the deficit by 11 percentage points of
GDP and bring it below the EU’s cap of 3 percent by 2013.

Markets fear the drastic belt-tightening to secure the deal
may plunge the economy into deeper recession and threaten its
meeting fiscal targets, prolonging the country’s debt crisis.

“Greece will not need additional measures, especially
‘painful’ measures. I see only one option ahead, delivering on
our targets with consistency,” Finance Minister George
Papaconstantinou told Sunday’s Eleftherotypia newspaper.

Greece’s economy, which makes up about 2.5 percent of the
euro zone, is expected to stay in recession for a second year in
2010 after a 2 percent slump in 2009.

The Bank of Greece projects the economic downturn will
deepen, with GDP seen contracting by 4 percent this year, as tax
increases and cuts in wages and pensions take a toll.

“The recession will be deepest in 2010 and thereafter there
will be a gradual recovery,” the minister told the paper. “I
remain optimistic and believe we will recover fast.”

The minister reiterated the socialist government’s stance
that debt restructuring was not an option, now or in the future.

“Debt restructuring would be disastrous for the country’s
credibility. It would lead to its marginalisation from capital
markets, to even more belt-tightening and a very deep
recession,” he said.

He said Greece could rely on the EU/IMF programme for its
funding needs without having to return to markets for borrowing
before the first quarter of 2012.

“The government has shown it is not counting political cost
when it comes to what needs to be done for the good of the
country,” Papaconstantinou told the paper.

Investment Advice
(Reporting by George Georgiopoulos; Editing by Louise Ireland)

Greece will not restructure debt – finmin