Greek Prime Minister George Papandreou on Saturday rejected, according to Reuters, there was even unofficial discussion over Greece abandoning the euro zone in order to bargain for better terms on its enormous debt obligations. Mr. Papandreou requested that his struggling country be “left alone to finish its task.”
Ministers belonging to the euro zone’s largest economies met in Luxembourg to go over Greece’s debt situation on Friday but Athens and senior EU representatives dismissed a report by Germany’s Spiegel Online that the Greek government had raised the possibility of abandoning the 17-member euro zone.[From Reuters]: “These scenarios are borderline criminal,” Papandreou told a conference on the Ionian island of Meganisi. “No such scenario has been discussed even in our unofficial contacts…I call upon everyone in Greece and abroad, and especially in the EU, to leave Greece alone to do its job in peace.”
European Central bank Governing Council member Erkki Liikanen – who also heads the Bank of Finland – on Saturday dismissed reports of Greece getting out of the euro and said restructuring (read: default) its $470 billion debt would provide no lasting resolution for the country’s challenges.
“No euro zone country wants to leave the euro,” Liikanen said in an interview at Finnish national broadcaster Yle.
While Greece and the European Union may deny the reports as they seek to calm nervous markets, the fact remains that Greece faces loans in excess of 150 percent of gross domestic product [GDP], a debt mountain that many consider as simply unsustainable. Instead of an estimated budget deficit of 9.4% of GDP in FY2010, the Greek deficit was 10.5%, despite a number of aggressive austerity measures, to some extent because the economy shrank more rapidly than expected.