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Pressure Mounts on Greece to Seek International Debt Relief

  • Robert Raffaele

Greece is facing more troubling news as it tries to get its growing debt under control. Fitch Ratings, one of the world's major credit rating agencies, downgraded Greece's status Friday due to concerns that the government will not be able to pay back $70 billion in debt. Greece is facing a key deadline in a matter of weeks.

Greece must raise $15 billion by the end of May to cover debt that is due, but nervous investors are helping to push the government's borrowing costs to record highs.

A recently downgraded debt rating could make Greece's attempt to get the money more difficult.

Finance Minister George Papaconstantinou says his country is not seeking to activate a eurozone and International Monetary Fund (IMF) rescue plan designed to prevent a default.

But he called the plan an important "safety net" and said officials are working out details of how it would work.

Italian Premier Silvio Berlusconi and French President Nicholas Sarkozy, both pledged support for Athens Friday. "The Greek authorities have taken courageous measures to improve the situation of their public finances. A support package has been approved by all the countries of the eurozone. We are ready to activate it at any time in order to help Greece," he said.

Greece is trying to reassure investors that recent austerity measures, including cuts in civil servants pay and pension freezes, will allow the country to repay $70 billion in debt.

Papaconstantiou says those measures shaved 40 percent off Greece's budget deficit during the first quarter of this year. But municipal workers fearful of losing their jobs demonstrated their opposition this week.

Economist Vassilis Vlastarakis, said, "Greece needs 12 billion euros in May. There are several possibilities. One possibility is to issue treasury bills. At least it can find at least half of that amount in the next weeks, so the Greek government in my point of view should stop making any comments about the situation. I think they should stick to their program."

Investment strategist Manos Chatzidakis agreed, saying, "The only thing we can do is show some figures and to be persistent in in our program, in the stability program."

The lessons of the financial crisis are not lost on some Greek youth. Two young boys who donated 20 euros from their piggy bank were invited, with their grandmother, for a tour of Parliament Friday.

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