Greece can avoid haircut but needs growth, PM says

Debt-hit nation will not become another Weimar Republic, Samaras tells Bild daily

Greece can avoid another haircut on its debt if it gets back on a sustainable growth path, the country's prime minister said in an interview published Thursday.

“Our debt is now officially considered sustainable. But for that of course we need growth,” Antonis Samaras said in an interview with Germany's Bild newspaper.

“We are trying to exit the recession, to reform the economy, so that we have enough income to pay and service debts,” he said.

Samaras said that Greece's current situation could be compared to that of Germany's Weimar Republic following the first World War. “However, we have learned from history,” he said.

“Austerity alone in the midst of a recession cannot lead to a healthy economy. This policy destabilizes democracy, destroys social cohesion and can lead to the rise of extremism,” the Greek premier said, expressing confidence that his country would avert the fate of the Weimar Republic.

“It is our aim to bring about a spectacular transformation in Greece and to turn it from a bad example into a shining example of a model economy... we're working on a success story. Everyone will realize that soon,” he said.

On Sunday, German Chancellor Angela Merkel did not rule out a haircut of Greek debt in the next few years.

After being vehemently opposed to accepting a haircut, Merkel said in an interview with the Bild am Sonntag weekly that it could be considered from 2014 if Athens' financial situation improves.

“If Greece can get by on its income one day again without taking on new debt, then we must look at and assess the situation. That won't be the case before 2014/15 if everything goes according to plan,” she told the paper.

[Combined reports]