MercoPress. South Atlantic News Agency

Embattled Greek PM warns in London of “contagion”

Papandreou said “it would be very cosy to say it is only Greece”

The Greek Prime Minister has admitted there is a “fear of contagion” as his nation battles its debt crisis. George Papandreou also insisted his country was not looking for a banking-style bailout and denied that his people were “reckless”.

Greece has been under pressure after revealing an estimated budget deficit of 12.7% of GDP, the highest level in the Euro-zone and more than four times higher the required EU level.

He told reporters he was taking action to address the debt problem and warned that Greece was not the only country facing fiscal difficulties. Fears over Greece's woes have hit the Euro as well as European stocks.

Speaking at a conference in London, he said: “It would be very cosy to say it is only Greece. There is a fear of contagion”.

Mr Papandreou also said his nation wanted to borrow at the same interest rates as other European countries and he warned that higher borrowing costs for Greece would drive up interest rates elsewhere.

He said: “Higher interest rates for us mean higher interest rates for those in Europe. We want to be able to borrow on the same terms as other countries in the Euro-zone. It is a fallacy to say the Greeks are reckless because it would just mean the problem is a problem of DNA.”

He went on: ”We're not looking for bailouts... we're simply saying we have a programme...and we need (EU) support for this program”.