Greece vows no default on loans at UN meeting

AP News
Posted: Sep 23, 2011 6:52 PM
Greece vows no default on loans at UN meeting

Greece's foreign minister has been telling leaders gathered at the United Nations General Assembly that his country is committed to paying back its loans and moving forward with economic reforms.

Stavros Lambrinidis said in an interview with The Associated Press on Friday that he has also been raising concerns about what he described as Turkey's bellicose rhetoric on Israel and Cyprus.

Lambrinidis was referring to Turkish threats to provide military escorts to aide ships headed for Gaza, following a deadly Israeli commando raid in June 2010 on a Turkish boat containing pro-Palestinian activists.

"Attempts to militarize the discussion in the Eastern Mediterranean are very dangerous and should be condemned by everyone," he said.

He also mentioned a dispute over drilling rights off of Cyprus, which is divided into a Greek Cypriot south and a Turkish Cypriot north.

The southern government began exploratory drilling for oil and gas this week, prompting strong protests from Turkey, which doesn't recognize the Greek Cypriot administration.

On Thursday, Turkish officials announced that a Turkish research ship will set sail for the Mediterranean to start oil and gas exploration.

Lambrinidis said that any deals between Turkey and the Turkish Cypriot North would be invalid under international law, since Turkey is the only country that recognizes the North.

"Agreements that Turkey decides to sign with the occupied territories in Cyprus are without any meaning, null and void by definition," he said.

On Greece's economic situation, he said he had a clear message for world leaders meeting at the United Nations, who worry about its massive debts: "Greece will not default."

Greece has been kept solvent by a euro110 billion ($149 billion) bailout in 2010 from other eurozone countries and the International Monetary Fund. But it needed another massive bailout this summer, and has angered international creditors by lagging behind in commitments to implementing reforms.

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European officials are speaking openly of the possibility of a Greek default, and the fears have roiled international markets. A default could shock the banking system and the global economy, leading to losses for banks holding Greek government bonds and dragging down other eurozone countries with shaky finances.

Lambrinidis expressed frustration that the talk of default was making his country's efforts to fix its debt woes more difficult.

"I believe this a time when such rumors are unhelpful," he said. "It is a time when we are in the process of extremely difficult changes that we have proven we can apply."