Greece has no plans to restructure its debt and the International Monetary Fund is not considering a plan, the country's finance minister, George Papaconstantinou, said on Saturday.

Papaconstantinou denied a media report circulating earlier that the IMF believed Greece's debt burden was unsustainable and had told European government and central bank officials that Athens should restructure next year.

Restructuring is simply not on the cards, he told Reuters on the sidelines of an IMF meeting in Washington. I think that the situation will improve and we will be able to go back to the markets in 2012.

Greece was the first euro zone country to need a bailout from richer EU members and the IMF after the global financial crisis, and its struggles to pay its debt have dented confidence in other euro zone nations' public finances.

Dow Jones Newswires on Saturday said a restructuring could involve giving Greece more time to pay back its debt or reducing the amount it has to pay back to investors. Papaconstantinou ruled out any such option.

We talk with the IMF all the time. There is no such discussion, he said.

In a news conference after the Reuters Insider interview, Papaconstantinou said the cost of a restructuring would be worse than that of sticking to the current repayment plan.

The negative reasons why we won't go through a restructuring exercise is because the pain and the cost is bigger than the benefit.

To see the Reuters Insider interview, click on


A German deputy foreign minister said on Friday that a voluntary Greek debt restructuring would not be a disaster and that Berlin would support it.

The German Finance Ministry on Saturday denied it was drawing up contingency plans for a Greek debt restructuring, after a report that it was studying various options if Athens failed to meet fiscal targets..

Papaconstantinou told Reuters that Greece was focused on implementing its structural reform and fiscal consolidation plan, and still believed that the country could return to debt markets and sell new bonds next year.

The Greek government has made it very clear that we are continuing the fiscal program and that we are continuing with the program of structural reforms. There is a major privatization drive ... to bring the debt down, he said.

Papaconstantinou told the news conference that the privatization agenda would be front loaded, and advisers to manage the public sale of companies would be appointed by the summer.

Greece has an unusually high number of state-owned firms, with a value equivalent to a year's economic output, and proceeds from privatizations could reduce the amount of debt on which it has to pay interest.

Papaconstantinou noted that markets were nervous now because of negotiations on an EU/IMF bailout for Portugal, but said they would calm down.

When all the European issues are settled -- and I think they will be in the next few months -- and as we keep following the program, which shows we are reducing the deficit ... I think that the situation will improve and we will be able to go back to the markets as planned for 2012, Papaconstantinou said.

Asked how he would convince investors they would be paid back all the money Greece owed, Papaconstantinou said: To convince the market you have to show you will be able to run a convincing primary surplus. We have done that before and we will do so again.

Our structural reforms are a supply shock to the economy, and a positive one, and therefore that will increase our growth potential. And we can have an interest rate burden that is manageable. The recent decision by the European Council, cutting the rate we pay by 1 percentage point, has been very good, he said.

(Reporting by Jan Strupczewski and David Milliken; Editing by Leslie Adler)