Greece's fiscal problems are also an issue for the entire eurozone, Finance Minister Giorgos Papaconstantinou said yesterday, warning that more countries could be affected. «Following (the economic troubles in) Greece, there are other countries, such as Spain and Portugal,» Papaconstantinou told a conference in Athens. «This is why the Greek issue, despite its particular Greek characteristics, is also a eurozone issue,» he said. Greece's financial problems have sparked fears of a spillover effect engulfing other vulnerable eurozone countries, such as Spain, Portugal, Ireland and Italy. The country has been pounded by markets recently after revealing its 2009 budget was 12.7 percent of gross domestic product, more than four times the EU ceiling of 3 percent GDP and three times initial estimates. The premium investors demanded for holding Greek debt rather than German Bunds last week hit a euro lifetime high of around 405 basis points. The spread between Greek and German 10-year bonds widened to 344 basis points yesterday from 327 basis points earlier. The minister also said Greece would support the idea of EU debt sales to supplement national issues, though the Greek government isn't proposing such an bond sale. A European bond sale would be a «useful» solution, said the minister. The EU is scheduled to unveil its recommendations to Athens on its austerity plan today. European Commission President Jose Manuel Barroso said late yesterday that Greece's deficit cutting program will be endorsed. «A deficit of such a magnitude must be decisively corrected,» Barroso said. The planned correction of the deficit by 2012 «is feasible but subject to risks,» he said. The EU has warned the Greek government that additional measures may be required to shore up its finances. «The Commission will be in charge of monitoring the implementation of the program through a very intense surveillance of budgetary developments in Greece,» Barroso said. Consultants at Capital Economics said yesterday that «fears that the further rise in Greek bond yields over the last week has stretched the public finances to breaking point may be a little over-done. «Nonetheless, Greece still faces an enormous challenge if it is to meet its financing requirements and step back from the brink of disaster,» it said in a note. Fears of bankruptcy are over the top Fears that Greece will go bankrupt are irrational, according to Nobel-laureate economist Joseph Stiglitz, who added that Greek bond spreads over German Bunds are excessively high. Speaking at a conference in Athens yesterday, Stiglitz said that excessive optimism exists in the market, as does excessive pessimism, which, on this occasion, is targeting Greece. He added that a fixation by governments with correcting fiscal deficits when economies are struggling with recession could prove to be counterproductive. «Deficit fetishism is a mistake. No company would only look at its liabilities. The implication of the problem we are all facing is that cutting deficits in the wrong way can be counterproductive,» he said. Stiglitz, who teaches at Columbia University and was once chief economist at the World Bank, has argued that the 2008 financial crisis has exposed the need for tighter regulation in the financial industry. He said all downturns eventually come to an end but that the important issue was how long and how deep they are and how much pain they inflict on citizens.