Greece says bail-out will put 'drachmaphobia' to rest



Greece's finance minister has urged EU leaders to vote to give the struggling country its next tranche of aid when they meet next week and remove the fear of an exit from the eurozone.

Yannis Stournaras said that removing the fear of a Greek euro exit was the single thing that would restore confidence among depositors, and urged EU leaders to agree to the disbursement of the next tranche of Greek aid when they meet on November (Xetra: A0Z24E - news) 20.

The "removal of drachmaphobia" will come after this, he said.

Mr Stournaras also warned that Greece faced a "very high" risk of default.

"Bankrupt, insolvency. We have to be very careful. I understand (our partners) press Greece to take some prior actions (agreed in return for help) but now, the risk of an accident is very high," Stournaras told the European Parliament when asked what would happen if a long-delayed aid payment was not forthcoming next week.

"We must be careful, there are limits," he added.

Eurozone ministers failed Monday to clear the aid payment worth €31bn euros for Greece which has been held up for months, deciding instead to hold another meeting next Tuesday on the issue.

Eurogroup head Jean-Claude Juncker said after the meeting that Greece had made much progress on its commitments to reduce debt and the public deficit but still had some last measures to put in place.

Greek Prime Minister Antonis Samaras had earlier warned that the country would go broke by Friday if Monday's meeting failed to produce the aid payment but Juncker said Athens would be able to roll over debt due on that day.

"I will do all I can to make sure that a decision is taken on November 20," Juncker insisted.

Last week, the Greek parliament passed a new package of austerity measures worth €13.5bn demanded by the troika of the EU, the International Monetary Fund and the European Central Bank in return for the aid payment.

On Sunday, parliament also passed a very tough 2013 budget, another key element in Greece's commitment to meeting the targets of its debt bailout programme.