Greek PM denies country will leave euro

By @ibtimes on

Greek Prime Minister George Papandreou on Saturday denied there was even unofficial discussion over Greece quitting the euro zone and asked that his troubled country be left alone to finish its task.

Ministers from the euro zone's biggest economies met in Luxembourg to discuss Greece's debt crisis on Friday but Athens and senior EU officials denied a report by Germany's Spiegel Online that the Greek government had raised the prospect of leaving the 17-member euro zone.

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 on Saturday shot down reports of Greece exiting the euro and said restructuring its 327 billion euro ($470 billion) debt would offer no permanent solution to its problems.

No euro zone country wants to leave the euro, Liikanen, who also heads the Bank of Finland, said in an interview at Finnish national broadcaster Yle.

Jean-Claude Juncker, head of the group of euro zone finance ministers who called the late Friday meeting, said there was a broad discussion of Greece and other international economic issues but said the idea of exiting the euro was stupid.

We have not been discussing the exit of Greece from the euro area. This is a stupid idea. It is in no way -- it is an avenue we would never take, he told reporters after the meeting attended by ministers from Germany, France, Italy and Spain.

We don't want to have the euro area exploding without reason. We were excluding the restructuring option, which is discussed heavily in certain quarters of the financial markets, he added.

But he said a meeting of all euro zone finance ministers on May 16 would discuss whether Greece needed a further economic plan. The EU is currently negotiating a bailout with Portugal, the third state it is rescuing after Greece and Ireland.

Despite a 110 billion euro international bailout, Greece, a euro zone member since 2001, has not cut its budget deficit as fast as it promised its lenders amid a deep recession. Gains from spending cuts and tax hikes have been partly erased by low revenues due to tax evasion and a deep recession.

Financial markets have been skeptical for months that Athens could manage its huge debt without eventually restructuring. As austerity bites, even some ruling socialist party politicians have been suggesting a soft restructuring which might involve lengthening maturities on the country's bonds.

On Friday, the euro fell nearly 1 percent against the dollar and the cost of insuring Greek debt against default was quoted at a record high in response to the Spiegel report.

Greek Finance Minister George Papaconstantinou attended the Luxembourg talks, his finance ministry said. It added that Greece remained committed to repairing its finances and returning to economic growth.

Asked by Italy's La Stampa newspaper if it would be easier to leave the euro, the minister said on Saturday: No, it's impossible. Above all, because the mechanism does not exist to leave the euro.

The Luxembourg talks were also attended by European Central Bank President Jean-Claude Trichet and Olli Rehn, the European commissioner for economic and monetary affairs.

(Additional reporting by Sakari Suoninen and Paul Carrel in Helsinki, Ian Simpson in Milan; Writing by Dina Kyriakidou; editing by Keiron Henderson)

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