Prime Minister George Papandreou, addressing the conference of Socialist MEPs in Athens on Tuesday, referred to what he called a "new model in Europe and a strengthening of our institutional organs; a need that appeared intensely in the European Union operation."

Papandreou added that Europe must become more democratic in order to tackle its problems.

The prime minister further cited the need for a new model of growth, governance and a new cooperation model in the Union.

"We are facing many challenges and one of the greatest is that without the models of social justice, transparency and democratic governance we shall continue to live in a situation in which banks will borrow with 1 percent and lend with 10 percent."

Referring to the European Accord, he stressed that it must be implemented to generate jobs and economic growth.

On the question of debt management, Papandreou said every country must have the ability of deciding by itself on the manner in which it will handle its debt crisis in a viable way.

Additionally, he referred to the situation that his PASOK government inherited from the previous government, as he stressed that Greece is not a poor country, instead it was governed in a poor manner.

Speaking earlier at a press briefing on the sidelines of conference, together with the European Parliament's Socialist Group president Martin Schultz, he expressed optimism that Greece will succeed and exit the current crisis without recourse to a new support mechanism or bailout.

Moreover, he expressed his thanks to the Socialist group, which played a decisive role in European decisions and supported Greece as well, as he said.

The Greek PM spoke of improvements in the text of conclusions both for the Eurobonds and the tax on fiscal transactions as well as the support mechanism.

Replying to a question on the ratings firms and another downgrading for Greece, Papandreou said ratings firms have graduated into an absolute panic, while he reminded that it was the same firms that had given AAA status to the toxic financial products that created the initial banking crisis.

"We must see who takes the decisions, he said, and added that the assessment firms are not accountable and this is something that the European Union must see."