REFILE-UPDATE 1-Greek PM says no need for default, restructuring

(Refiles to fix typos in paragraph 15)

* Says EU took time to react to speculation.

* Spain and Portugal “victims of hysteria”

* Calls for EU to revive growth

* Greek-German resentment “not irreparable”

(Adds details, quotes)

By Martin Roberts

MADRID, May 23 (BestGrowthStock) – Greek Prime Minister George
Papandreou ruled out defaulting on debt payments or
restructuring in a Spanish newspaper interview published on

“We have no need for defaulting on payments or
restructuring,” Papandreou told El Pais. “We have opted not to
do so. We have opted to pay back the loans we have requested.”

When asked, Papandreou said he did not believe his
government would reach a point beyond which it could not ask
people to tighten their belts further in order to convince
markets its public finances were in order.

“That is what we have decided, and that is the reason why we
have this programme of measures from the European Union,” he

EU governments are trying to regain investors’ confidence
after months of turmoil that have pushed many euro zone member
states’ borrowing costs sky high led to a 110 billion euro
bailout of Greece and the setting up a $1 trillion safety net to
try to prevent the contagion spreading.

Papandreou said he thought EU governments had been slow to
act in order to prevent the Greek crisis spreading to other
members of the 16-country euro currency.

“The EU took time to realise that speculators’ attacks on
Greece were just a step before attacking other countries and
even threatening the stability of the euro zone,” he said.

The debt crisis has provoked huge instability in the
11-year-old euro currency and led to demands for EU states to
work much harder on coordinating their economic policies and
bring their finances into check.

Harsh spending cuts in Greece which have led to violent
riots have been matched by austerity measures in Spain and
Portugal, whose wide budget deficits have also helped to roil
financial markets.


“Spain and Portugal were not so bad, but they have been
victims of hysteria,” Papandreou said.

The Prime Minister said that austerity measures would
curtail growth in the Greek economy, and called for the EU to
provide stimulus measures.

“We have to create the necessary conditions for growth and
in this, once again, the EU can help,” he said.

“Whether by pushing ahead with infrastructure projects or
creating the necessary backdrop for more investment in the EU,
concretely in the southern countries, and also in central and
eastern Europe.”

Papandreou said he and German Chancellor Angela Merkel had
been “sincere with each other”, but added there was “resentment”
between the two countries over the cost of the bailout and
pressure to enforce austerity measures.

“It is not irreparable. I would say there is resentment. But
I believe what bothers people is what we consider prejudice and

Legislators in Germany, the euro zone’s biggest economy, on
Friday approved the $1 trillion safety net, but Merkel failed to
secure the broad backing she had sought to ease public hostility
to bailing out weaker euro zone states.

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(Reporting by Martin Roberts; Editing by Louise Heavens)

REFILE-UPDATE 1-Greek PM says no need for default, restructuring