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BRUSSELS : Greek Prime Minister George Papandreou on Thursday warned Greece may be forced to resort to IMF aid and rejected a German call to expel eurozone nations in serious breach of fiscal rules.
"This is where Europe must come in and say 'OK in this case we either can provide what an IMF would provide... or in the end Greece may have to choose the option to go to the IMF'," Papandreou told the EU parliament in Brussels.
The euro plunged on currency markets after Papandreou already hinted on Wednesday that Greece could seek recourse to International Monetary Fund loans, a move seen by some as undermining confidence in the eurozone as a whole.
The prime minister was equally trenchant on threats of eurozone exclusion.
"Simply punishing may not be the solution, and punishment and kicking out someone out would be a failure not only of the country (kicked out) but also of the union," Papandreou said.
"One can be punished... because of bad conduct, there are specific protocols defining that exactly, but the thing is that we have to make sure that countries who have problems are also supported," he added.
On Wednesday German Chancellor Angela Merkel said that in light of the fiscal crisis in Greece, Europe should be able to exclude countries that break fiscal rules from the eurozone as a measure of last resort.
Papandreou stressed that Greece had not put out a call for aid but wanted a "loaded gun" to ward off speculators.
"We are not asking for money from Germans, French, the Italians or other workers or taxpayers.
"What we are saying is we need strong political support in order to make these necessary reforms and make sure that we are not going to pay more than necessary in order to get these reforms enacted," he told the assembled MEPs.
Papandreou was very clear on one point: "We're not going to default."
- AFP/vm
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