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Greek FM rules out default but targets at risk

Greek FM rules out default but targets at risk
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First Published: Tue, Oct 04 2011. 06 00 PM IST

Greece’s finance minister Evangelos Venizelos waits for the start of an euro zone finance ministers meeting in Luxembourg. Photo: Reuters
Greece’s finance minister Evangelos Venizelos waits for the start of an euro zone finance ministers meeting in Luxembourg. Photo: Reuters
Updated: Tue, Oct 04 2011. 06 00 PM IST
Athens: Greek finance minister Evangelos Venizelos defended his government’s handling of the economy on Tuesday, saying there was no talk of Greece defaulting on its debt and blaming a deep recession for its failure to meet a deficit target.
“There is no discussion about a default,” Venizelos told a news conference.
Greece’s finance minister Evangelos Venizelos waits for the start of an euro zone finance ministers meeting in Luxembourg. Photo: Reuters
Greece announced this week that it would miss its 2011 target. News that the debt-choked country’s deficit will be 8.5% of gross domestic product (GDP) instead of a forecast 7.6%, despite harsh spending cuts and tax increases, set European officials scrambling to avert a default.
Venizelos warned that meeting the revised 2011 deficit target would still require effort. Parts of the government’s reform plans have yet to be voted through parliament. “If state mechanisms do not work and if we do not have the national cohesion and solidarity that is required, obviously we may have problems with our 8.5% target,” Venizelos said.
He said Greece could wait until mid-November to receive its next tranche of EU/IMF aid, which Greek officials had earlier said they needed this month. The delay gives European officials more time to apply pressure on Greece to implement reforms.
Euro zone finance ministers said on Monday they were studying whether private creditors should write off more Greek debt, a step closer to default that sent the euro tumbling on fears it could harm banks across the single currency zone.
Venizelos said the tough measures his government has announced had changed the climate in debt talks, and European partners were more concerned with seeing structural reforms to the Greek economy than with fiscal measures. “We will not need more measures, they are not needed, as long as we are consistent,” he said.
Venizelos said Greece would put up 880 million in bonds as collateral for Finland, demanded in exchange for its part of the second Greek bailout, but he believed no other European countries were seeking a similar deal.
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First Published: Tue, Oct 04 2011. 06 00 PM IST