Finance minister: Greece on the brink of 'virtuous circle'

Greece is doing all it can to achieve its economic targets and overcome recession, Finance Minister Evangelos Venizelos said on Tuesday. “Greece is implementing an impressive tough and expeditious budget saving program,” he said. “By the end of the year we will save 22 billion [euros], approximately 10% of GDP.” “We should make a super effort to achieve our fiscal targets… so that we start entering a virtuous circle.” “However, recession has always proved deeper than expected,” he said. Cumulative recession has already reached 12% of GDP, the minister said. “Euro-Atlantic” participation in the resolution of European financial problems is critical, he said. German Chancellor Angela Merkel said Germany was “not available” for new economic aid programs but would do all it could to help Greece overcome the financial crisis and regain the market’s confidence. She said Germany had "absolute respect" for structural reforms pursued by the Papandreou government and the most important thing was for Greece to regain confidence. "Whatever Germany can do to support that, we will do," she said. Venizelos pledged on Monday to continue making budget cuts "at any political cost". The Greek government on Monday rejected media reports that it may default on up to half of its 350 billion euro sovereign debt. The Greek government announced a new austerity package on Wednesday, including cuts in public-sector salaries and pensions, furloughs for 30,000 state employees through the end of the year, and changes in the tax system, in response to the demands of international lenders. The government is struggling to convince EU/IMF lenders that the country is on a path to recovery. If it fails, Greece could run out of cash. Merkel said on the weekend euro-region leaders must erect a firewall around Greece to avert a cascade of market attacks on other European states, which could threaten the break-up of the currency area.