Juncker: EU Determined to Prevent Greek Default

Posted October 3rd, 2011 at 8:20 pm (UTC-5)
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Chief eurozone negotiator Jean-Claude Juncker is strongly denying allegations that some in the EU want Greece to default on its debt and tossed out of the eurozone.

Juncker said Monday the eurozone finance ministers will do everything to avoid a Greek default. He said a final decision on whether Greece will get an $11 billion installment from the 2010 bailout will be made in mid-October. An EU, European Central Bank and International Monetary Fund assessment of Greek economic reforms will not be ready before October 13th.

Greece says its economy will shrink 5.5 percent this year and another 2.5 percent in 2012, making it difficult to meet the deficit targets necessary to qualify for the bailout payment.

Greece says without the loan payment, it would default and slip into bankruptcy. That would have grave consequences for European and U.S. economies.

World stock markets fell sharply Monday on fears of a Greek default.

Greece has imposed a series of austerity measures including spending cuts and tax hikes. Many Greeks are weary of the new measures that have eliminated government jobs and cost them more money.

The government's proposed 2012 budget includes eliminating 30,000 government jobs by the end of next year.