Greece 'needs £70bn to avoid default'

By DAILY MAIL REPORTER
Updated: 03:13 EST, 21 April 2010

Greece may need as much as £70bn to avoid defaulting on its debt, the governor of the German Central Bank has warned.

Warning: Greece's debt situation is 'worsening'

The grim prediction was made by Axel Weber, who is also a governing council member of the European Central Bank, as the interest rate that the country borrows at hit new heights yesterday.

According to the Wall Street Journal, Mr Weber told German politicians that Greece's debt situation was worsening and that the 'numbers are changing all the time'. His comments unnerved markets already made jittery by delays to the arrival in Athens of European and International Monetary Fund officials for talks on an aid package.

Until yesterday, the EU had put a figure of £40bn on a joint EU/IMF bail-out package for Greece.

It had been estimated that the UK will have to stump up £650m because it is a large contributor to the IMF.

But Mr Weber's remarks will fuel fears that British taxpayers will have to pay far more, although the UK remains outside the 16-strong eurozone. Interest rates on Greek debt with a ten-year maturity jumped to a record 7.84%.

Last night, Greek finance minister George Papaconstantinou declared the nation 'won't be left high and dry'.

Negotiators from the IMF and European Union are due in Athens today to start ten-day talks.

Struggling to cope with a debt pile of £263bn, Greece needs to borrow about £47bn this year alone. It has a projected public debt of more than 120% of gross domestic product.