Greek Prime Minister George Papandreou on Saturday told his Socialist party that the country would not default on its debt obligations.
"I reassure everybody. Those too, who daily speculate and spread false rumours about our country: Greece will not go bankrupt," he said in a televised speech, dpa reported.
Rumours have been circulating in
Athens that the country would soon have to turn to the International Monetary Fund ( IMF) for help, and that secret decisions had already been taken to dig the old printing presses of Greece's former currency, the drachma, out of the cellars of the central bank.
The prime minister compared the country's present woes to being in a state of war.
He also said that he regretted having to take the harsh measures which were "for some people unfair." This applied particularly to those who were not responsible for the country's financial troubles.
"But what would be worse would be what would happen to our country if we hadn't taken these measures," he continued.
Greece has found itself paying a high price to sell bonds because investors fear that its massive budget gap this year could cause it to default on debt payments. Athens needs to borrow some 54 billion euros this year, of which 20 billion must be borrowed in April and May.
Prime Minister George Papandreou has said he wants Greece to be able to borrow at similar rates to other members of the eurozone.