Athens Galvanized by Prospects of 'Selective Default'

World | July 14, 2011, Thursday // 16:55|  views

Greek Finance Minister Evangelos Venizelos addresses the media during a press conference in Athens, Greece, on 12 July 2011. Photo by BGNES

The news that Greece could declare "selective default" has galvanized society, as the extraordinary EU summit scheduled for June 14 continues to spread panic on European markets.

The crisis crippling the debt-ridden country threatens to spill over into other Eurozone nations, Bulgarian 24 Hours daily has reported.

The Greek government is seeking a permanent solution which would ensure the long-term sustainability, lower interest rates and an extension of the country's public debt before September 15 and the release of a sixth tranche of a EUR110 B loan agreement signed with the troika, Greek Finance Minister Evangelos Venizelos said in a media statement on Tuesday.

Speaking to reporters, the Greek minister stressed that the government was "open" to all issues within this framework. Venizelos underlined that the term "selective default" should not scare people.

"It is not a real bankruptcy, not a real financial event. It is an evaluation of three credit rating agencies on state bonds", the Finance Minister stated, pointing out that a credit rating assessment cannot possibly turn into a self-fulfilling prophecy.

Venizelos further stressed that Greece wants a "crystal clear" and strong message combined with a full coverage of the country's financial system either from the European Central Bank, other EU member-states or the EFSF.

"We, Greece, are ready to enter a new program ... We also want full coverage, not just for the country's fiscal requirements, but for the stability of Greece's financial and banking system."

The Deputy Prime Minister renewed his appeal a unified stance on the austerity plan with a view to improving Greece's bargaining position with creditors.

"The invitation to the political opposition to negotiate together the new program and its details is still valid", he added.

The Greek Finance Minister is expected to send letters to the Eurozone governments on Wednesday to set out Greece's plans for its privatization program before Friday's EU leaders summit.

Greece has pledged to raise EUR 50 B through privatization by the end of 2015 to help fund a second bailout, after it received a first EUR 110 B international rescue package last year.

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Tags: Evangelos Venizelos, Greek Finance Minister, Greek debt, default, privatization, bailout, summit

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