Greece has no current need for credit and the excessive pessimism of the financial markets is unjustified, Greek Finance Minister George Papaconstantinou told German weekly Der Spiegel in an interview.
Papaconstantinou said that while Greek spreads had soared this week, they would narrow once again when Greece had proven that it was doing all it could to improve the country’s financial situation.
REDUCED DEFICIT
“We are in a very serious fiscal situation, we have debts with a dangerous dynamic,” Papaconstantinou said. “But we have a new government that clearly recognizes the problem. With our savings program, we will reduce the deficit in the coming year by 3.6 percentage points.”
On Friday, Greek Prime Minister George Papandreou said Greece would meet its debt obligations and planned to reduce its budget deficit to below 3 percent of GDP in four years, sending bond yields lower.
Papaconstantinou said Greece would make its statistics office independent of the state to increase confidence in the reliability of its statistics, and an independent commission would regularly examine and assess the Greek budget.
PESSIMISM
“The excessive pessimism of the markets is not justified,” he said. “Many of our problems have less to do with the absolute figures than to do with the fact that no one believes us, because are statistics were not reliable.”
Prices of Greek bonds and shares have fallen sharply after credit rating agency Fitch downgraded Greek debt this week with a negative outlook because of the much larger-than-expected budget deficit this year.
He said there was no reason for Greece to ask for help from the IMF. It would solve its problems “inside the European Union and according to the bloc’s rules.”
He said Greece would release a new bond at the beginning of next month.
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