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The OECD and the European Commission rule out a Greek default on its debt

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The OECD and the European Commission rule out a Greek default on its debt

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The European Comission and the OECD insisted in Davos that there will not be any bailout for the Greek economy because there is no risk it will default on its debt. In an exclusive interview with euronews’ reporter Constantino de Miguel, both institutions agreed that the situation of the Mediterranean country will not be a threat to the euro zone or the euro currency, provided that corrective measures are applied by Athens.

Joaquín Almunia, European Commissionar for the Economy and Monetary Affairs (Spanish)
“Hasta hace pocos días las quejas que se escuchaban eran porque el euro estaba demasiado fuerte, estaba sobrevalorado por los mercados y ahora de repente hay gente que empieza a decir: la zona euro se va a dividir. Mire no hay nada de eso ! . La zona euro esta permitiendo a todas las economías del euro de afrontar mejor la crisis, de afrontar con más recursos, con más respaldo, con mas responsabilidad, eso sí, a cambio de adoptar las medidas necesarias para ajustar los desequilibrios que ha producido la crisis.”

(English Translation)
“Until a few days we heard complaints that the euro was too strong, it was overvalued by the markets, but now suddenly people are starting to say the euro zone will be divided. Well, this will not be the case ! . The euro area is rather allowing all its economies to better address the crisis thanks to more resources and more support. In return they (Greece, Ireland, Spain, etc) should show more responsibility, and should take steps to adjust the imbalances produced by the crisis.”
Will an eventual Greek default be a threat to the euro currency, and to the integrity of the euro zone ?

Angel Gurría, head of the OECD said there will not be such an scenario, as Athens is applying the right measures.

Angel Gurría, Secretary General of the OECD (English)
“Of course it is not a threat, I mean, it represents about 2% of the collective GDP of the region and at the same time they have a program and they have the European Union which is lending both political support and also will overlook the process. The Greeks understand they have to do it, the economic team is in place, you know, it’s gonna be tough, but they are gonna do it and no, it’s not gonna put either the European system or the euro into any danger.”

Constantino de Miguel (Spanish)
“En Davos algunos economistas han advertido que la deuda publica de estados como Grecia es una bomba de relojería que podría hacer saltar el euro en pedazos. La bomba no estallara según han asegurado a Euronews los mas altos responsables económicos de la zona euro y de la OCDE. Pero con dos condiciones: mas solidaridad en el club del euro y más austeridad en los países afectados.”

(English Translation)
“In Davos some economists have warned that the public debt of states like Greece is a time bomb that could blow the euro apart. The bomb will not explode as top economic officials from the Eurozone and the OECD told Euronews, but this provided there is more solidarity in the euro club and more austerity in the affected countries.”