October 14, 2012 / 4:54 AM / 7 years ago

German finance minister says Greece will not default

SINGAPORE (Reuters) - German Finance Minister Wolfgang Schaeuble said on Sunday that Greece would not default, but warned that if Athens did exit the eurozone it would be damaging not only for the zone as a whole but also Greece.

“I think, it will not happen that there will be a state bankrupt in Greece”, Schaeuble said at a meeting with business leaders in Singapore.

“Greece has to take a lot of very serious reforms and this will harm. Everyone is trusting that the Greek government is doing what is necessary.”

Greece is locked in talks with the European Union, European Central Bank and International Monetary Fund on a new set of spending cuts and reforms in exchange for the next tranche of loans saving the debt-crippled country from bankruptcy.

Greece expects to agree a new austerity package with its lenders and for the EU and IMF to bridge their differences on how to cut the country’s debt by the time EU leaders meet on October 18-19, says Greek Prime Minister Antonis Samaras.

“We do not see that there is any sense to speculate on Greece leaving the Euro”, Schaeuble said. “That would be very damaging for Greece and the euro.”

Reporting by Gernot Heller; Editing by Michael Perry

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