Greece's Problems Shared by Europe: Finance Minister

Greek Financial Minister George Papaconstantinou told CNBC Tuesday that there is "no question" the country's three-year deficit reduction plan will succeed, but he said its problems are also something that pertain to all of Europe.

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"What has become very clear in this affair is that over and above the fiscal problems that any particular country...there are kinds of questions about what kinds of use people make of things like credit derivative swaps, how opaque these markets are, how it's not clear who's trading what and how these can push countries...to the brink,'' Papaconstantinou told CNBC in a live interview.

Papaconstantinou suggested more regulation and transparency in the CDS market, including measures such as a ban on "naked short selling." Hedge funds have been accused of aggravating the Greek debt crisis by using that instrument — betting on a default without owning the underlying bonds.

"We're at the end of a financial crisis and we don't seem to have actually taken all the lessons in."

Papaconstantinou said that although many doubt the country's ability to reduce its debt so efficiently, Greece has proven its determination by making tough decisions in its austerity plan, which would lower the deficit from 12.7 percent to less than 3 percent in three years.

The country will make nominal wage cuts in the public sector, boost taxes on items such as cigarettes and fuel, and reform social security, taxes and the budget — decisions that have outraged citizens and sent them to the streets in protest.

"Broadly they seem to be supporting what we're doing because they understand that this is a national crisis, and in a national crisis you have to [make] difficult decisions ... but that's the only way to go forward," Papaconstantinou said. "The biggest deficit that we face ... is a credibility deficit."

Papaconstantinou was scheduled to meet with President Barack Obama on Tuesday, as Greek Prime Minister George Papandreous urged the Group of 20 nations to crack down on market speculators and said the action was necessary to ward off risks of another global financial crisis.

Papaconstantinou defended a controversial financial arrangement between Goldman Sachs

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[GS  Loading...      ()   ] and the Greek government back in 2001, which helped mask part of the nation's debt as it struggled to meet criteria to adopt the euro.

"What this particular bank did was a particular operation which at the time was fully legal and within Eurostat rules... similar operations were done in other countries," Papaconstantinou said. "Unfortunately this particular operation got a lot of publicity because it came in the middle of Greece's financial and fiscal woes."

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—Reuters contributed to this report