Global General

Greece denies default or exit from eurozone

(Xinhua)
Updated: 2010-06-09 06:36

ATHENS - The Greek government categorically denied Tuesday persisting rumours of a possible debt default and an exit from the eurozone.

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"It is obvious that all these scenarios of an imminent catastrophe do not help the country overcome the economic crisis," said government spokesman George Petalotis, when asked to comment on bleak scenarios circulating in media in the past few months on the future of the Greek economy.

"All that these rumours create is a climate of insecurity for Greek citizens and markets and we will not stand that," he said.

Greece has faced an acute debt and economic crisis since late 2009 and the government secured a package of low interest loans from the European Union and the International Monetary Fund last month to avoid bankruptcy.

In return, the country will have to go through a strict austerity program and a series of drastic reforms to reduce a huge budget deficit and return to growth in three years' time.

Despite the government's repeated pledges that the changes will be fully implemented without wasting time, doubts remain from foreign experts and media, which predict that this autumn the country could perhaps return to its old currency, the drachma.

Noting that European Commissioner Olli Rehn recently stated there was no problem with the implementation of the Greek Stability and Growth Program, Petalotis stressed that everything was under control and the government did not even consider supplementary measures.

Pessimistic scenarios systematically published by foreign media over the past few months created questions about the motives of the analysts who reproduced them, Greek officials commented.

"These fanciful rumours are totally groundless, people should not pay any attention," said Vassilis Rapanos, head of the Greek Banks Union, who on Tuesday held a meeting with the head of the main opposition New Democracy political party, Antonis Samaras, on the state of the Greek banking system and the exit plan from the crisis.

"Greek banks and the Greek economy can handle the pressures," said Nikos Nanopoulos, Vice President of the Greek Banks Union, adding that Greece would overcome the crisis through restoring its credibility abroad and focusing on development.

Shadow minister of Development Kostas Hatzidakis said: "Greece is committed to succeeding. We should all agree to that. Instead of complaining, we should focus on growth."

In the meantime, the Greek National Statistics Agency announced inflation reached a 13-year high in the country in May. It now stands at 5.4 percent compared with the same month last year. It is the highest percentage reported in Greece since August 1997. In April this year, inflation stood at 4.8 percent and in January at 2.4 percent.