ECOFIN: Spain Fin Min: Not Worried About Greek Debt Default

ECOFIN: Spain Fin Min: Not Worried About Greek Debt Default

BRUSSELS -(Dow Jones)- Spanish Finance Minister Elena Salgado Tuesday said the Greek government will do everything necessary to avoid a default on its debt, and she isn't worried by that possibility.

Spain holds the rotating presidency of the European Union for the first six months of this year, and Salgado was speaking to reporters as she arrived to chair a meeting of finance ministers from the EU's 27 members.

The ministers will review plans submitted by the Greek government to cut its budget deficit from 12.7% of gross domestic product last year to under 3% in 2012.

The cost of insuring against a default by the Greek government rose to a record high Thursday, after the plan was unveiled.

"Greece will do what is necessary" to avoid a default, Salgado said.

She added that EU finance ministers "do not consider the possibility" of the Greek government not reducing its budget deficit.

A key challenge facing the Greek government as it struggles to retain investor confidence is a lack of credibility, since official measurements of the size of its debt have proved unreliable in the past.

Salgado said the government is taking steps to improve the accuracy of official statistics.

"As far as I know, now they are credible," she said.

-By Adam Cohen and Joe Parkinson, Dow Jones Newswires; +322 741 1486;

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

January 19, 2010 03:45 ET (08:45 GMT)

Copyright 2010 Dow Jones & Company, Inc.