Greek FM rules out fears of debt default

Greek Finance Minister Evangelos Venizelos defended his government’s handling of the economy on Tuesday, saying there was no talk of Greece defaulting on its debt and blaming a deep recession for its failure to meet a deficit target. “There is no discussion about a default,” Venizelos told a news conference. Greece announced this week that it would miss its 2011 target. News that the debt-choked country’s deficit will be 8.5 per cent of GDP instead of a forecast 7.6 per cent, despite harsh spending cuts and tax increases, set European officials scrambling to avert a default. Venizelos warned that meeting the revised 2011 deficit target would still require effort. Parts of the government’s reform plans have yet to be voted through parliament. “If state mechanisms do not work and if we do not have the national cohesion and solidarity that is required, obviously we may have problems with our 8.5 per cent target.” He said Greece could wait until mid-November to receive its next tranche of EU/IMF aid, which Greek officials had earlier said they needed this month. The delay gives European officials more time to apply pressure on Greece to implement reforms.