Davos 2010: Mounting fears over Greek public finances

BBC News
29 January 2010

Mounting fears over Greece’s ability to pay off its debts have continued to hit the financial markets.

The euro has dropped to a six-month low against the dollar and Greek government debt is considered the riskiest since the euro was formed in 1999.

Greek Prime Minister George Papandreou has repeatedly denied speculation that it will have to be bailed out.

The European Union (EU) also said there was no chance of Greece defaulting or leaving the eurozone.

Greece’s public debt stands at about 300bn euros ($419bn, £259bn).

Reports have suggested that the EU would, if necessary, bail Greece out – seen as a way to calm the financial markets.

“Eurozone officials would like a way to say yes to the bond markets, without appearing to let Greece off the hook,” said Stephanie Flanders, the BBC’s economics editor.

But in public comments at the World Economic Forum in Davos, the EU economic commissioner Joaquin Almunia said the 16-member bloc was not considering a bail-out or a default.

The EU, Spain and Germany have also denied that Greece could be kicked out of the eurozone.

The article, with video, continues at BBC News.

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