European commissioner for economic and monetary affairs Olli Rehn has argued heightened concerns around Greece’s economic situation, and dismissed recent market unrest associated with Italy and Spain as unwarranted.

Rehn said that experts are working “night and day” on implementing the measures outlined in the July 21 agreement, and he expected the package to be fleshed out in a matter of weeks rather than months.

He was confident that investors would be reassured about the implementation of the agreement once they understood the work going on “behind the scenes”.

Rehn said that though investors seemed “unconvinced” measures in the agreement would put Greece on a sustainable track, and that they had reached the wrong conclusion.

“The 21st July agreement did deliver major improvements in the terms and conditions for financing Greek public debt. There will be a significant extension in the average maturity of all loans and a lowering of interest rates on official loans.

“A reduction of interest rates to about 4% should reduce cumulative interest payments by some €25 billion between 2011 and 2020. This implies a reduction in the debt ratio in 2020 (without private sector involvement) of around 10% of GDP.”

The offer of private sector involvement also implied further important benefits for Greek debt sustainability.

On Spain and Italy, the commissioner said that the “market unrest” associated with Italy and Spain was not justified on the grounds of economic fundamentals.

“It is not justified for Italy. It is not justified for Spain. Such dramatic changes in the markets are incomprehensible. It is not as if the fundamentals of the Italian or Spanish economies have changed overnight!

“Both countries have committed themselves to ambitious measures to reach fiscal consolidation and to put their economies back on track. And both countries are implementing those measures. It is essential they do so, and pursue growth-enhancing structural reforms. That's what matters, and that's what should be taken into account.”

Rehn said that while the 21 July agreement is a milestone in economic policy coordination, further work is necessary following on from a package of economic governance reforms the commission proposed last year.

“It should be clear to all that Europe is facing up to its challenges. We are not shying away from the task of crisis management. On the contrary, we are acting on all fronts to tackle the challenges. So we develop a stronger and better functioning euro area, and the right foundations for more growth and jobs in Europe.”

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