Greece resists EU fiscal demand

Greece was in a tug of war with the European Union yesterday over whether the government will adopt additional measures to rescue its economy, as Athens pushed for the eurozone to put together a more specific assistance package that would deter speculators. Having already announced cuts in public spending and some tax hikes, the PASOK government was yesterday prompted by EU officials to come up with more ways to reduce its public debt and deficit. «Our view is that risks are materializing and therefore there is a clear case for additional measures,» said Economic and Monetary Affairs Commissioner Olli Rehn as he arrived for a meeting of EU finance ministers (Ecofin) in Brussels. Finance Minister Giorgos Papaconstantinou was due to be put under more pressure yesterday and today, when the finance ministers of the eurozone will meet separately but he insisted that no extra measures are needed at this time. Instead, he argued that following an expression of political support from eurozone members last week, more specific details about the help that Greece could expect needed to be put forward. «My guess is that what will stop markets attacking Greece at the moment is a further, more explicit message that makes operational what was decided last Thursday,» he told the Associated Press. He added that the 16 countries that use the euro need to «work out a mechanism so that, if necessary, the mechanism will be there» to help any member nation that cannot pay its debts. «I think this is the logical way of addressing the issue,» said Papaconstantinou. The finance minister also played down reports that Greece had in the past used complex financial instruments in deals with Wall Street financiers to mask its real debt. He said that Greece had used currency swaps and other derivative contracts during the past decades, as had other European countries. «Since they were made illegal, Greece has not used them,» he said.

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