LONDON, Feb 19 (Reuters) - Prime Minister George Papandreou said on Friday that Greece wanted to borrow at the same interest rates as other European countries, warning that higher borrowing costs for Greece would drive up interest rates elsewhere.
Addressing a conference of centre-left policymakers in London, Papandreou said he was taking action to address Greece's debt crisis and was not looking for a banking-style bailout but wanted EU support to help lower its borrowing costs.
'Higher interest rates for us mean higher interest rates for those in Europe,' he said. 'We want to be able to borrow on the same terms as other countries in the euro zone.'
Speaking later to Greek reporters, he added: 'We are asking for political support from the EU and, if needed, economic support.'
Papandreou said he would consider extra austerity measures suggested by the EU to restore credibility with investors.
'There needs to be an assessment to see what needs to be done before we take a decision (on additional measures),' he told the Greek reporters.
Concern over Athens' ability to repay its debt mountain has shaken confidence in the euro and prompted European Union leaders to issue a vague pledge that they would take coordinated action, if needed, to preserve the stability of the single currency.
Papandreou warned that Greece was not the only country facing fiscal difficulties.
'It would be very cosy to say it is only Greece. There is a fear of contagion.'
He said foreign investors were testing Europe's resolve and Greece could not tame attacks on its debt alone, but concerted government action could check bond market speculation.
'We do have the power, if we have the will, to deal with some kinds of speculation,' Papandreou told the conference. 'Speculation can not be faced by one country alone, it needs others' support (in the EU).'
EU Competition Commissioner Joaquin Almunia said earlier that Greece deserved the EU's support but must take the action necessary to fix its public finances crisis.
'Greece has very serious problems that can only be tackled from Greece,' Almunia told the same conference.
'If this responsibility (to tackle the debt crisis) is assumed by the Greek authorities, as a member of the EU, as a member of the euro area, Greece deserves support and deserves solidarity.'
Spanish Prime Minister Jose Luis Rodriguez Zapatero defended the Greek government, saying: 'The largest majority (in Greece) has no responsibility for what has happened and much less Papandreou's government that deserves trust for the steps it has undertaken and the credibility it has shown.'
((For an Interactive Factbox on Greece and its economy please click on http://link.reuters.com/pem78h))
(Reporting by Estelle Shirbon, Matt Falloon and Lefteris Papadimas; Editing by Paul Taylor) Keywords: GREECE PAPANDREOU/ (UK bureau, uk.online@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Addressing a conference of centre-left policymakers in London, Papandreou said he was taking action to address Greece's debt crisis and was not looking for a banking-style bailout but wanted EU support to help lower its borrowing costs.
'Higher interest rates for us mean higher interest rates for those in Europe,' he said. 'We want to be able to borrow on the same terms as other countries in the euro zone.'
Speaking later to Greek reporters, he added: 'We are asking for political support from the EU and, if needed, economic support.'
Papandreou said he would consider extra austerity measures suggested by the EU to restore credibility with investors.
'There needs to be an assessment to see what needs to be done before we take a decision (on additional measures),' he told the Greek reporters.
Concern over Athens' ability to repay its debt mountain has shaken confidence in the euro and prompted European Union leaders to issue a vague pledge that they would take coordinated action, if needed, to preserve the stability of the single currency.
Papandreou warned that Greece was not the only country facing fiscal difficulties.
'It would be very cosy to say it is only Greece. There is a fear of contagion.'
He said foreign investors were testing Europe's resolve and Greece could not tame attacks on its debt alone, but concerted government action could check bond market speculation.
'We do have the power, if we have the will, to deal with some kinds of speculation,' Papandreou told the conference. 'Speculation can not be faced by one country alone, it needs others' support (in the EU).'
EU Competition Commissioner Joaquin Almunia said earlier that Greece deserved the EU's support but must take the action necessary to fix its public finances crisis.
'Greece has very serious problems that can only be tackled from Greece,' Almunia told the same conference.
'If this responsibility (to tackle the debt crisis) is assumed by the Greek authorities, as a member of the EU, as a member of the euro area, Greece deserves support and deserves solidarity.'
Spanish Prime Minister Jose Luis Rodriguez Zapatero defended the Greek government, saying: 'The largest majority (in Greece) has no responsibility for what has happened and much less Papandreou's government that deserves trust for the steps it has undertaken and the credibility it has shown.'
((For an Interactive Factbox on Greece and its economy please click on http://link.reuters.com/pem78h))
(Reporting by Estelle Shirbon, Matt Falloon and Lefteris Papadimas; Editing by Paul Taylor) Keywords: GREECE PAPANDREOU/ (UK bureau, uk.online@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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