BERLIN (MNI) – Greek Prime Minister George Papandreou said Monday
that Greece “will be paying [its debt] back in full.”
“We won’t restructure, we won’t default,” Papandreou vowed in a
speech at the Humboldt University here. “This is a strong commitment.”
Still, while the prime minister said loans from its Eurozone peers
would be paid back with interest, he said the interest rates “were quite
high when we did these loans.”
“We need to be careful: if interest rates are too high … they
would be unsustainable to service,” he cautioned, “That’s why we’re
discussing the terms” of these loans.
“We have the capacity to deal with the problems,” Papandreou
reckoned. The European Financial Stability Facility (EFSF) and the
planned permanent European Financial Mechanism (ESM) “are capable to
regulate the bond market and manage the debt for the benefit of all.”
“The scope and the flexibility of the EFSF is important to allow
these mechanisms to work,” he stressed. “The ideas of buybacks [of
government bonds by the EFSF] should be allowed on the table.”
“We should give us the power needed to deal with the debt crisis,”
Papandreou insisted. There needs to be some spreads on bonds from
Eurozone member states “but not so much that it derails the economy of a
country.”
The prime minister also advocated the joint issuance of eurobonds.
“Eurobonds could attract capital” for European infrastructure projects
which, in turn, would stimulate economic growth, he argued.
Papandreou’s speech was disrupted repeatedly by protesting Greek
students.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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