Optimistic Stournaras prepares for challenges

By Sotiris Nikas

The Finance Ministry is working apace to fulfill the country’s obligations in the coming days and months, with the first key date ahead being the Eurogroup meeting on January 21.

On Wednesday Finance Minister Yannis Stournaras singled out the vote on the tax bill, set for next week, as the immediate priority, and expressed confidence that the Greek economy will begin to rebound in the second half of the year.

“I am the first to say that 2013 will be a difficult year, but this is when we prove whether we will be able to save ourselves from falling off the cliff,” the minister told Alpha 989 radio, adding that “we have all the elements required to make that happen and I hope that the political system will indeed demonstrate the consensus required for us to reach this main target.”

Stournaras went on to say that this is the first new year in a long time when all the right conditions have been in place for it to be a better year than the previous one, as Greece stands to see a rebound in the second half of 2013. “I remain an optimist, albeit a reserved one. This year we wish to initiate growth, to show how we want Greece to be in 2020 or 2025, and through which we shall get to where we aim to be,” he said.

He also referred to the prior actions required for the disbursement of the next bailout installments: “In 2013 we have to fulfill certain obligations in order to get the next tranches. Within January the main thing is the mini tax bill,” he said in reference to the draft law on taxation reform that is expected to clear Parliament by January 11.

January’s prior actions also include the approval of the electricity rate hike. Once this and the tax bill are approved, then the country’s troika of creditors – the European Commission, the European Central Bank and the International Monetary Fund – will give the green light for the disbursement of the January tranche, comprising 9.2 billion euros.

The Finance Ministry was a hive of activity on Wednesday as the aim is for Greece to do all it has to do in time for the January 21 Eurogroup meeting of eurozone finance ministers. On Monday the government will publish the bill that will validate the legislative acts it has passed over the last month and a half in order to cover the previous tranche’s prior actions.

At the same time the countdown begins for the preparation ahead of the tranches of the next couple of months: In February (19 or 26) the quarterly inspection of the troika for the updating of the midterm fiscal plan is set to begin, while in March the government will have to have prepared the plan for public sector redundancies on a quarterly basis till the end of 2014.

The next major challenge will be the drafting and voting of the so-called “maxi” tax bill in spring. Stournaras said yesterday that a working group will be formed for the maxi-bill to be tabled in April or May in Parliament and incorporate clauses for combating tax evasion and for changes to the tax collection mechanism. He stressed that with the merging of tax offices the state will save human resources that will then focus on inspections, a crucial need these days.

“When you want to combat tax evasion, you do it in two ways: The first is with checks so as to minimize the possibility of tax evaders not being caught and the second is the appropriate penalties,” said Stournaras, who knows all too well that the troika will not tolerate another delay and failure to contain tax evasion.