THE GREEK government has laughed off speculation that it will have to default or abandon the European single currency owing to its massive debt problems. Recent press reports had raised the possibility of a Greek debt default or of Greece being forced to drop the euro, as similar problems in Hungary sparked a fresh bout of global nerves over the eurozone’s future. But the country’s finance minister, George Papaconstantinou hit back. He said: “This is down to rumours that have no basis in fact, which are speculative... all that is improbable... and comical. Last month, Athens agreed a rescue package worth $131 billion with the EU and IMF (International Monetary Fund) to cover obligations after it could no longer afford to raise fresh funds on the international markets. The package effectively back-stopped Greece’s finances as it introduced a drastic austerity programme to put its accounts in order. Despite the accord, and a separate $1 trillion EU-IMF deal for the wider eurozone, speculation continued that Greece and possibly other weak eurozone members such as Spain or Portugal could be pushed into default or into quitting the euro. “Most investors do not know about the efforts we have made [to stabilise the public finances] nor the results we are getting from the economic recovery plan, which will become visible soon,” Papaconst-antinou said. “I think things will change (then).” The Greek central bank also announced a significant improvement in the budget deficit, which fell to $11.45 billion in the five months to May from $17.56 billion for the same period in 2009. That was based on a sharp fall in government expenditure, the figures showed, with revenues rising to $23.89 billion from $22.02 billion while spending fell to $30.33 billion from $35.11 billion in the 2009 period. The Socialist government is aiming to cut the budget deficit to three per cent of gross domestic product, the EU maximum, by 2014 after it ballooned to 13.9 per cent last year.
