Greece will not default on its debt: minister

16th September 2010, Comments 0 comments

Greek Finance Minister George Papaconstantinou dismissed suggestions Athens will be forced to restructure its debt, a scenario he said would break the eurozone, the Financial Times reported on Thursday.

"Restructuring is not going to happen. There are much broader implications for the eurozone should Greece have to restructure its debt," Papaconstantinou told the Financial Times.

The minister's comments came as he began a European roadshow in London on Wednesday aimed at wooing investors to buy long-term Greek debt, as the country struggles to rebuild its battered economy and finances.

"People fail to see the costs to both Greece and the eurozone of a restructuring: the cost to its citizens, the cost to its access to markets," said Papaconstantinou.

"If Greece restructures, why on earth would people invest in other peripheral economies? It would be a fundamental break to the unity of the eurozone."

Papaconstantinou is set to visit Paris and Frankfurt on Thursday as he completes the roadshow that is also being led by officials from the European Union and International Monetary Fund.

Athens is trying to regain investor confidence on the bond markets after its narrow rescue from default in May when the EU and IMF put together a 110-billion-euro (140-billion-dollar) three-year rescue package.

A draconian austerity drive of wage and pension cuts applauded by the EU and IMF appears to have borne fruit despite protests and Greece now favours a full return to the bond markets for funding with longer-term debt next year.

© 2010 AFP

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