Greek economic crisis

Greece on verge of default as doubt grows over €8bn bailout

Greek prime minister George Papandreou under fire amid rumours that creditors are about to pull the plug

the Guardian

Saturday 10 September 2011 19.33 BST

Greece’s embattled prime minister, George Papandreou, has moved to counter growing fears that Athens is about to default on its debts, saying there was a clear route back to economic health.

Speaking amid high security as protesters converged on the northern city of Thessaloniki for its annual international trade fair on Saturday, the socialist leader said: "There are two paths. One is the path of major change that will lead to a productive and creative Greece.

"The other path, the supposedly easier one, does not look problems straight in the eye and leads to disaster. We insist on the path of change."

Despite strong denials that the country is heading for a default, rumours have grown that the end game is approaching. Wolfgang Schäuble, the German finance minister, has insisted that a sixth, €8bn (£6.8bn) instalment of aid will not be released unless Greece enacts corrective measures to kickstart its economy and improve competitiveness. Experts from Washington and Brussels will fly into Athens this week to assess whether Greece is sticking to its programme of drastic spending cuts and tax rises, amid fears that its creditors could be ready to pull the plug.

Share prices plunged on both sides of the Atlantic on Friday, as Athens was forced to deny that it would default, perhaps as soon as this week. The Dow Jones closed more than 300 points down, while in London the FTSE100 lost more than 2% of its value.

For article GO HERE