Greek PM says plan to tackle debt 'on target'

GREECE’S BORROWING needs are covered until mid-March, and Athens so far is meeting the goals set out in its austerity plan, Greek prime minister George Papandreou said in an interview with BBC television broadcast yesterday.

Market concerns about Greece’s debt pile have hit the euro in recent weeks.

“At this point we don’t have a need for borrowing, our borrowing needs are covered until mid-March,” he said in response to a question on whether there would be any new Greek bond issuance next week.

Mr Papandreou said that despite street demonstrations against austerity measures his government has taken to tackle the debt crisis, he believed there was broad support in Greek society for painful economic reforms.

“Even though there are austerity measures and they do hurt, we have the support right now for the austerity measures which is around 50 to 60 per cent of the population, and the government also has that support,” Mr Papandreou said.

“What we’re seeing here, and I haven’t seen this except during the Olympic Games in 2004, is a real sense of unity by the Greek people of wanting to make a change,” he said, blaming the previous administration for Greece’s debt woes.

Mr Papandreou said European Union partners should continue to offer political support to Athens.

“Let us, together with the EU authorities, the commission and the European Central Bank, let’s sit down, let’s look at how our progress is doing, how we’re doing in the stability and growth plan that we have tabled,” he said.

“We’re on target, beyond target on January statistics so we’re doing well. If we do need extra measures, we will take extra measures in order to reduce our deficit this year by 4 per cent. We’re ready to do so if necessary.”

Mr Papandreou said that while Greece was not asking for financial support from EU partners, it did need strong political backing as it battled to restore its credibility with financial markets.

This was particularly important for Greece to be able to borrow at lower interest rates than it was currently facing, he said.

“We need the help so that we can borrow at the same rate as other countries, not at high rates which undermine our ability to make the changes we need to make,” he said.

Meanwhile the Greek finance minister George Papaconstantinou said the euro’s problems are “bigger than Greece” as financial markets wager that other euro-region states will fail to rein in deficits.

In an interview with German newspaper Welt-am-Sonntag, Mr Papaconstantinou said a "few hedge funds" are "betting against the euro in general and Greece in particular", driving up interest rates on Greek bonds.

Greece’s problems are aggravated by investors’ lack of trust in measures being taken to tame the deficit, he said. “My main problem is that nobody believes my numbers . . . If I tell investors that the deficit is 12.7 per cent, they say, ‘Yes, maybe.’ If I cut it by 4 per cent, they say, ‘How can we be sure?’” Mr Papaconstantinou said.

Although Greece has not asked the European Union for financial help, the nation does not rule out EU or IMF assistance, he said. – (Bloomberg, Reuters)