By Dina Kyriakidou
WASHINGTON (Reuters) - Greek Finance Minister Evangelos Venizelos sought to reassure nervous markets and EU partners on Saturday by pledging his debt-ridden country would do whatever it takes to avoid default and stay in the euro zone.
During an IMF meeting in Washington that was dominated by fears that Greek debt woes could trigger a wider European crisis, threatening banks and hurting the world economy, Venizelos dismissed any talk of bankruptcy.
"Greece will always be in the euro and Greece will never go bankrupt because this would be destructive for the euro zone and for many other countries beyond the euro zone," he said in a statement after meeting his German, French and Italian and Belgian counterparts.
The European Union and IMF handed Greece a 110 billion euro bailout to save it from bankruptcy last year in exchange for austerity measures and reforms, but markets remain unconvinced a debt mountain of over 160 percent of GDP is sustainable.
"Greece is determined to honor all its obligations. No Greek paper will ever go uncovered," Venizelos told reporters.
Slow implementation of unpopular fiscal measures and reforms prompted the abrupt departure of EU, IMF and ECB inspectors, known as the troika, from Athens earlier this month, with a key sixth installment of the bailout loan at risk. Greece has said it has enough cash until next month.
Venizelos said the government was confident the troika would return as planned next week, given that Athens announced a new wave of unpopular austerity measures since they left, and that the 8 billion euro loan tranche will be approved.
Greek officials said much hinged on Venizelos' meeting with IMF Managing Director Christine Lagarde on Sunday and that they hoped the next tranche would be approved by early next month.
"We should have confirmation of the sixth tranche of the loan at the Eurogroup of October 2," said an official who requested anonymity.
A second bailout deal of 109 billion euros, agreed in July when it was clear Greece would not be able to return to markets next year, has stumbled on banks' reluctance to participate and European Union members asking for collateral in exchange for providing cash.
Venizelos will also meet on Sunday with Charles Dallara, the head of the Institute of International Finance, and Deutsche Bank CEO Josef Ackermann, who serves as chairman of the global bank lobby group, which has taken a lead role in talks on private sector participation in a Greek bailout.
Greek officials said they hope the second Greek bailout would be ready by early November. Negotiations with banks on taking a haircut on Greek paper have yet to conclude, and euro zone parliaments still need to approve the deal.
"Greeks know these are critical times, that the sacrifices, the injustices and pressures are the price we pay for mistakes of the past, mostly the responsibility of governments and politicians," Venizelos said.
"What we have done in the past few weeks, has sent a strong international message."
(Reporting by Dina Kyriakidou; Editing by Tim Ahmann)