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Borg warns of 'likely' Greece default

Borg warns of 'likely' Greece default

Published: 05 Jul 2012 16:07 GMT+02:00
Updated: 05 Jul 2012 16:07 GMT+02:00

Attempts to help Greece avoid bankruptcy appear doomed to fail, Swedish Finance Minister Anders Borg said Thursday, adding however that Athens might still manage to cling to the euro.

"The most probable outcome is that you end up with some kind of default in Greece," Borg said in an interview with Sveriges Radio (SR).

"Considering the way the situation has been handled so far, one cannot rule out that (Greece) will fall into bankruptcy in the end," he added.

Greek Prime Minister Antonis Samaras, who leads a new three-party coalition government, was meeting Thursday with auditors from the European Union, the International Monetary Fund and the European Central Bank in a bid to renegotiate his country's second bailout.

The Greek government is expected to promise creditors that it will redouble privatization efforts to show that it remains on a recovery path that will enable it to rejoin the world economy.

Borg stressed that even if the new Greek government manages to get an extension of payment deadlines and meets all its pledges, its target of a debt to gross domestic product ratio of 120 percent by 2020 remains too high.

"A 120 percent debt level is rarely sustainable, particularly not in a country with very weak growth prospects," Borg said.

The Swedish finance minister, whose country is not a member of the eurozone, meanwhile said it remained unclear if a default would necessarily push Greece out of the common currency bloc.

"Obviously, they only have harsh alternatives," he said.

"They could either do this by building up better prospects for the future inside the euro, or at the end of the day, they might choose to leave," he added.

AFP/The Local

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Your comments about this article

18:05 July 5, 2012 by Mb 65
Amazing how quick these politicians are.
23:06 July 5, 2012 by tixximmi
It will be Germany that leaves the Euro. Greece is doomed because they won't be able to cut spending. It's only a matter of time. The European Union can not spend their way to prosperity. www.survivalbasictraining.com has some other good articles on this topic. Other European countries will slowly pull back from the Euro.
23:27 July 5, 2012 by dizzy09
Thank you Borg for telling us something we already knew from listening to the BBC and the rest of them.If you are such a genius why not tell us how the current economic crisis in Europe can fixed.
08:42 July 6, 2012 by towns
@ Mb 65 & dizzy09

You'd think Borg is slow on the uptake, but he still admits more than Eurocrats like van Rompuy, Juncker, Merkel or Barros who'd like to pretend there isn't a problem with the eurozone if they could (they can't anymore).
14:58 July 9, 2012 by Marc the Texan
The Euro is finished. There is no saving it. Long past the point of no return as I've been saying for a long time. The longer the day of reckoning is put off the worse it will get, until it can be put off no longer.
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