Greece Stops Short Of Sending Call For Aid (HBC)

George Papaconstantinou, Greece’s finance minister, has said that the Greek government cannot call for outside aid, at a point when the country struggles to cut the largest budget deficit in the European Union. “The worst possible signal which we could send out is one calling for outside help,” he said in an interview with Bloomberg Television in Athens yesterday. “We will tackle the deficit,” he said, adding that the tax revenues in January exceeded forecasts “by some percentage points.”

As of now, investors have not bought into claims made by Papaconstantinou that Greece will be able to push its deficit down below 3% of GDP, as stipulated by the EU. Meanwhile, Greek two-year bond yields have attained the highest level in almost a decade, with concerns about finances spreading to Portugal and Spain too.

“The current state of the markets suggests Greece may need conditional support from the key European institutions and governments,” said Janet Henry, chief European economist at HSBC Holdings Plc (ADR) (NYSE: HBC), in an e-mailed note.