Greece warns debt restructuring would be 'catastrophic'

20th June 2010, Comments 0 comments

Greece's finance minister warned Sunday that restructuring the country's debt would be "catastrophic" for its economy, in an interview published in the weekly Proto Thema.

"We have fought to avoid... a default on payments and restructuring of the debt, and we have avoided it thanks to the support mechanism" from the European Union and International Monetary Fund, George Papaconstantinou said.

Restructuring the debt "would be catastrophic for our economy, which continues to need loans", the minister said. "For as long as the recovery plan for the economy is applied, the possibilities for refinancing the debt increase."

On Thursday, a team of European and IMF experts gave Greece a stamp of approval, declaring the country's recovery program to be on track.

Austerity measures were adopted by the Socialist government in exchange for the release of a first installment of loans from a three-year 110-billion-euro (136-billion-dollar) EU-IMF bailout package.

Papaconstantinou ruled out any return to Greece's national currency.

"No such outcome exists. Every country in the eurozone continues to act to protect the single currency and strengthen the framework in which the eurozone operates," he said.

Russian Finance Minister Alexei Kudrin on Saturday bluntly dissented from Europe's insistence that Greece should avoid default, saying the Mediterranean country will require a restructuring of debts by creditors.

© 2010 AFP

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