No need to restructure Greek debt: minister

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No need to restructure Greek debt: minister

ATHENS - Greece will not need to restructure its debt or take extra measures beyond a swathe of austerity cuts agreed with the EU and the International Monetary Fund, the Greek finance minister said on Sunday.

By (AFP)

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Published: Sun 30 May 2010, 6:13 PM

Last updated: Mon 6 Apr 2015, 11:13 AM

‘Greece will not need additional measures,’ George Papaconstantinou told Eleftherotypia daily in an interview, adding that debt restructuring ‘would be disastrous for the country’s credibility.’

The minister said the recession gripping the country would peak in 2010 and that recovery would ‘gradually’ begin thereafter.

‘I remain confident and I believe that we will recover very quickly,’ he said.

Greece has accumulated debt of nearly 300 billion euros (368 billion dollars) and was narrowly saved from default earlier this month by the first instalment of an 110-billion-euro bailout loan from the EU and the IMF.

The government had to adopt unpopular austerity measures to clinch the loan, including tax hikes, wage and pension cuts and a hiring freeze in the civil service.

It has also pledged to trim massive waste in state hospitals which have a combined debt of around 5.6 billion euros.

The minister on Sunday insisted the ruling Socialists would not back down in the face of strong opposition to the austerity measures from unions who have so far held four general strikes and waves of street protests.

‘The government has proven that it does not calculate the political cost when it comes to doing what is necessary for the good of the country,’ he said.

Papaconstantinou also said he has a ‘close and constructive’ cooperation with Bank of Greece governor George Provopoulos, who was recently criticised by government lawmakers for allegedly failing to protect the country’s battered bonds from speculators.

‘The governor has given detailed explanations and I will respond to parliament (on the issue),’ the minister said.

A group of government lawmakers this month said speculators were given free rein by a central bank decision in October to extend the period permitted to investors to ‘recycle’ failed bond transactions.

‘The extension of this period ... objectively creates great margin for ... speculation and manipulation,’ said the lawmakers, who included the head of parliament’s financial affairs committee Vasso Papandreou.

The Bank of Greece has rejected the charge.

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