Greece's new government is working to correct a "lack of credibility" in the financial markets, according to its finance minister George Papaconstantinou.

Papaconstantinou's comments came amid growing concern that the Greek economy was debt-stricken and could be rocked by a double-dip recession following financial problems in Dubai. Papaconstantinou, however, said that Greece would not need an EU bail-out.

Greece's deficit is estimated at 12.7 per cent of GDP, with debt above 110 per cent  of GDP.

Papaconstantinou apparently told the Wall Street Journal that the cost of Greek government debt and the cost of insuring it had risen. But in a separate interview with the BBC's World Service he blamed the country's financial problems on the previous government.

"We are aware that we have a very difficult economic and fiscal situation. We are concerned that the international markets are looking at us in a very worried way. We do believe there is a credibility issue here having to do with the policies of the previous government and we're working to correct that lack of credibility."

Papaconstantinou said a new budget that was currently being submitted to parliament aims to reduce the budget deficit by 3.6 percentage points.

The finance minister also called for a "suspension of disbelief" so the international community would not lose faith in Greece in the meantime.

"There will not be a point where the EU will need to come to the rescue of Greece. This is because we are sending the right signals and putting into force the kind of policies that reassure that we are serious about fiscal sustainability," he told the BBC.