Greece PM rules out restructuring of national debt

Greek Prime Minister George Papandreou has said restructuring the nation's debt would be "catastrophic" for the country's credibility and its economy.

Izvor: BBC

Sunday, 12.09.2010.

15:40

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Greek Prime Minister George Papandreou has said restructuring the nation's debt would be "catastrophic" for the country's credibility and its economy. If debt repayments were suspended, he said Greece "would head towards a potential and probable collapse of the banking system". Greece PM rules out restructuring of national debt That, he said, could lead to the loss of Greek families' property, which would be "a tragedy". His comments come after the IMF agreed to give Greece a new loan. Greece is imposing tough economic measures including pay cuts and tax rises in return for a massive EU-IMF bailout to stave off bankruptcy, after debts close to 300bn euros were revealed. It is hoped that strict financial controls will reduce the budget deficit from 13.6 percent of annual output in 2009 to 8.1 percent this year. On Friday the IMF said it would provide Greece with EUR 2.5bn, its share of a fresh EUR 9bn loan instalment, with the rest to come from the EU. Greece has already received EUR 20bn of a EUR 110bn international rescue loan, agreed earlier this year as its economy went into meltdown. Data this week showed Greece's economy shrank 1.8 percent in the second quarter. EU and IMF inspectors are due in Athens next week to review the progress of Greek austerity measures. However those measures implemented to tackle the massive debt burden have led to widespread protests and strikes. On Saturday Greek unions staged mass protests in the city of Thessaloniki.

Greece PM rules out restructuring of national debt

That, he said, could lead to the loss of Greek families' property, which would be "a tragedy".

His comments come after the IMF agreed to give Greece a new loan.

Greece is imposing tough economic measures including pay cuts and tax rises in return for a massive EU-IMF bailout to stave off bankruptcy, after debts close to 300bn euros were revealed.

It is hoped that strict financial controls will reduce the budget deficit from 13.6 percent of annual output in 2009 to 8.1 percent this year.

On Friday the IMF said it would provide Greece with EUR 2.5bn, its share of a fresh EUR 9bn loan instalment, with the rest to come from the EU.

Greece has already received EUR 20bn of a EUR 110bn international rescue loan, agreed earlier this year as its economy went into meltdown.

Data this week showed Greece's economy shrank 1.8 percent in the second quarter.

EU and IMF inspectors are due in Athens next week to review the progress of Greek austerity measures.

However those measures implemented to tackle the massive debt burden have led to widespread protests and strikes.

On Saturday Greek unions staged mass protests in the city of Thessaloniki.

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