ATHENS, Nov 29 (Reuters) - Greece needs to convince financial markets and its European Union partners that it has a credible plan to cure its fiscal woes, EFG Eurobank's CEO said on Sunday, viewing last week's selloff as overdone.
Greek bank shares sold off and 10-year government bond yield spreads over bunds widened to a seven-month high last week on investor worries over Greece's deteriorating finances.
"It is necessary to convince markets and Brussels that we have a credible plan that radically tackles the huge deficit and debt problem in a permanent way in the medium term," Nikos Nanopoulos, chief executive of the country's second largest lender, said in an interview with Sunday's To Vima newspaper.
"Delays in reducing the deficit ... feed and increase the public debt and as a result have an impact on the country's credit rating. And this is something that touches all Greeks as it means higher borrowing costs first for the state and then for all borrowers," he said.
Greece's socialist government, which came to power Oct. 4 this year, aims to shrink the deficit to 9.1 percent of GDP in 2010 from 12.7 percent this year through spending cuts and a clamp down on tax evasion.
Nanopoulos said last week's selloff which saw the banking sector shed 9 percent on Thursday was overdone as the country's banking system is healthy.
"The markets' reaction was exaggerated. We have a credible and healthy banking system. This was shown by the course of the banking system during the crisis and was confirmed by the recent nine-month results," he said.
He said Greek banks' successful access to the international capital and money market reflected foreign investors' confidence in the banking system.
On Friday Greek officials sought to reassure markets that Greece's banking system was sound and that the country was facing no borrowing difficulties.
Greece, which borrowed more than 60 billion euros ($90 billion) this year, would be tapping capital markets for considerably lower amounts next year to refinance debt and plug fiscal holes, its finance minister said.

($1=.6699 euros)

(Reporting by George Georgiopoulos; Editing by Mike Nesbit) Keywords: EUROBANK CEO/ (george.georgiopoulos@reuters.com; +30210 3311813; Reuters Messaging:george.georgiopoulos.reuters.com@reuters.net)

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