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Greece won't default says PM

Greece won't default says PM
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There is no need to impose new austerity measures in Greece, the government says. That is small comfort to firefighters protesting at cuts to pension and wage benefits that have already taken place.

They voiced their anger in Thessaloniki where the prime minister offered fresh reassurances that the debt-ridden country can avoid defaulting on loans.

Ruling out any restructuring of the massive national debt, George Papandreou said such a move would be “catastrophic.”

Suspending debt payments would raise the prospect of a collapse of the banking system and Greeks losing their property, according to the premier.

“But we avoided all this. And there is no further discussion,” he said.

Greece must cut its budget deficit to 8.1 per cent of GDP this year from 13.6 per cent in 2009 to meet the terms of a 110-billion-euro IMF/EU bailout. But tough measures have hurt state revenues and economic activity, plunging the country into a deeper recession.