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UPDATE 1-Greece cannot borrow at current rates for long - finmin

Published 04/06/2010, 02:16 PM
Updated 04/06/2010, 02:20 PM

(Adds quotes, details)

ATHENS, April 6 (Reuters) - Greece cannot borrow at current rates for a long time but has no intention of using an EU-IMF aid mechanism for the time being, the country's finance minister said on Tuesday. "Interest rates are very high and it's clear we cannot continue like this for a long time," Finance Minister George Papaconstantinou said in an interview on television station Mega.

Markets pushed Greece's risk premium to a euro lifetime high on Tuesday amid growing doubts over the debt-laden country's capacity to resolve its debt crisis and fresh scepticism about an EU-IMF aid mechanism.

"Greece will use the mechanism if needed but at this moment there is no such need," Papaconstantinou said, adding that he was confident that Greece would cover all its borrowing needs for the year and meet its budget targets.

Greece's borrowing requirements are covered for April and it has another month before it needs to borrow again.

He said the EU's statistics office Eurostat was likely to revise last year's deficit of 12.7 percent of GDP slightly up, but the revision would not affect the target to narrow the deficit to 8.7 percent of GDP this year.

"The 2009 deficit was affected by lower than estimated growth, and this by itself increases the deficit by 0.2 percentage points," he said, adding that other factors might also affect the final deficit number for last year. He said any revision would be well below one percentage point.

The Bank of Greece said last month that Greece's budget deficit had reached 12.9 percent of GDP. (Reporting by Harry Papachristou; writing by Ingrid Melander; editing by Stephen Nisbet)

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