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Greece's prime minister, George Papandreou, told reporters in Brussels on Friday that European Central Bank President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker see "no possibility" of a Greek default, Bloomberg News reported. Papandreou also said that there was no possibility of Greece leaving the euro area, according to the report. Pressure on Greece has been mounting in recent weeks after the country admitted that its deficit this year will rise to 12.7% of gross domestic product. Fitch Ratings cut on Tuesday Greece's sovereign credit rating to BBB+ from A-, saying the downgrade "reflects concerns over the medium-term outlook for public finances given the weak credibility of fiscal institutions and the policy framework in Greece."
Joaquin Almunia: we don't need a Greek bail-out because the country won't default
There is no bailout and no "plan B" for the Greek economy because there is no risk it will default on its debt, the European monetary affairs commissioner insisted on Friday.
Greece’s finance minister has strongly rejected the idea that Athens will be forced to restructure its debts, saying that a default would break the eurozone.
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“Restructuring is not going to happen. There are much broader implications for the eurozone should Greece have to restructure its debt,” he said.
“People fail to see the costs to both Greece and the eurozone of a restructuring: the cost to its citizens, the cost to its access to markets. If Greece restructures, why on earth would people invest in other peripheral economies? It would be a fundamental break to the unity of the eurozone.”
The contagion "domino effect" from Greece no longer threatens the rest of Europe, according to the director general for economic affairs at the European Commission. In addition, Portugal and Ireland were said to be "in a much better place", while the credibility of Spain and Italy had "increased" – claimed Marco Buti. Addressing the Future of economic governance conference in London, hosted by the Policy Network think-tank, Buti told delegates: "The domino effect from Greece has been broken down; there is an increasing perception in the markets that the countries are delivering on the structural reforms, and we have strengthened political credibility with the firewalls.
The NASDAQ is above 3,000 for the first time in ten years.