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Greece predicts a budget surplus and says new debt deal is in sight

Published 20/07/2011

A European debt deal is "attainable" at an emergency EU summit this week, Greece's finance minister said, signalling progress in talks between governments and private bond holders in drawing up a new rescue deal.

Evangelos Venizelos also said Greece remained on course to reach a primary budget surplus next year, despite missing key fiscal targets so far in 2011.

Greece is enacting major economic reforms alongside an austerity programme as it grapples with a national debt topping €340bn (£298.5bn) that have brought it to the brink of default.

Leaders of countries that use the euro are to attend the emergency talks in Brussels tomorrow amid fears the fallout from Greece's woes could spread to larger European countries.

"Reaching a solution is attainable because this solution does not only include Greece," Mr Venizelos said at his central Athens office.

"At issue is the euro and the resilience of the eurozone. That is why protection of Greece is a self-defence mechanism for the eurozone. That will help us avoid a domino effect.

"(We are witnessing) organised attacks on countries with very good macroecenomic data, such as Italy for example," he said.

"There is no panic, this is a very cool-headed and well-organised attack."

Greece is being kept afloat by £96.6bn in emergency loans from other eurozone members and the International Monetary Fund, but remains locked out of bond markets by high interest rates and will require a second bail-out expected to involve a similar amount.

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