Greece was in a tug of war with the European Union yesterday over whether the government will adopt additional measures to rescue its economy, as Athens pushed for the eurozone to put together a more specific assistance package that would deter speculators, reports Kathimerini.

Having already announced cuts in public spending and some tax hikes, the PASOK government was yesterday prompted by EU officials to come up with more ways to reduce its public debt and deficit.

Finance Minister Giorgos Papaconstantinou was due to be put under more pressure yesterday and today, when the finance ministers of the eurozone will meet separately but he insisted that no extra measures are needed at this time. Instead, he argued that following an expression of political support from eurozone members last week, more specific details about the help that Greece could expect needed to be put forward. “My guess is that what will stop markets attacking Greece at the moment is a further, more explicit message that makes operational what was decided last Thursday.”

Markets attacking Greece. This is precisely the position the Greek Finance Minister is taking regarding the dire situation of his country’s finances. Targeting investment banks and the shady world of hedge funds appears to top Papaconstantinou’s agenda as he accused his EU partners of creating a “psychology of looming collapse,” according to the EU Observer.

Yet, investment firms including Goldman Sachs arranged currency swaps for Greece over the last decade that allowed Athens to raise funds to reduce its budget deficit while pushing payments well into the future. Those transactions were not classified as loans, reports the the New York Times, and not made known to Brussels officials.

European Commission economy spokesman Amadeu Altafaj Tardio told a news conference in Brussels that the EU’s statistics office, Eurostat, has already sought answers to the allegations, but Mr Papaconstantinou defended his country’s actions.

“These kinds of more exotic financial instruments were, at the time, completely Eurostat legal,” he said. “Greece was not the only country using them. They have since been made illegal and Greece has not used them since,” he added.

But skepticisim over the Greek position reigns in other Eurozone countries including Germany, which is expected to lead an eventual Greek bailout. Süddeutsche Zeitung writes:

Historical revisionism related to the financial crisis is in high gear. Higher powers are blamed, Wall Street is ascribed supernatural influence and bankers have been credited with omnipotence. Indeed, high finance is now said to have lured Greece with a siren song of concealed debt, to Europe’s vexation.”

“But this mystification conceals reality. Those responsible for the Greek debt crisis can be found in Athens. The Greek government made promises to the country that it couldn’t afford. That is why they worked with the investment bank Goldman Sachs to conceal the true dimensions of public debt from the European Union budget watchdogs. The adage currently circulating in Brussels is true: There are lies, damned lies and Greek statistics. Yes, Goldman helped in the deception and even profited from it. But the bankers weren’t sirens. Competition mandated that they offer all of their financial products to those who were willing to pay for them — including governments who were only interested in cheating.

The BBC brings the focus in on neither the Greeks nor the hedge funds but the very volatile Euro:

…there are widespread doubts among those who support the euro that it can survive in its present form whilst fiscal policies are decided at the level of national governments.

So as Nicolas Veron of the Bruegel Institute says “the markets are testing the limits of the single currency policy framework”.

In fact, concludes the BBC, the respected economist Paul Krugman had a take on all this today: “The real story behind Europe’s troubles lies not in the deficit but in the policy elites, who pushed the Continent into adopting a single currency well before the Continent was ready for such an experiment.”

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