Former Economy and Labor Minister Louka Katseli was on Monday the first former PASOK government official to testify to the prosecutors regarding the allegations by Greece's former representative to the International Monetary Fund, Panayiotis Roumeliotis about warnings to Athens on the consequences of a Greek recourse to a bailout.

Katseli said after exiting the economic prosecutors' office that «my testimony was in two parts: The first one concerned the controversial statements by Mr Roumeliotis about the information that the [then] Prime Minister [George Papandreou] and the Finance Minister [Giorgos Papaconstantinou] had on the IMF's positions, and mainly those of [Dominique] Strauss-Kahn. On this one I told the prosecutor that I had no knowledge of and did not participate in these contacts.

"The second part concerned the crisis itself and its management, and I reiterated my position that I have publicly expressed, that the systemic crisis of debt in Greece and the crisis of competitiveness cannot be resolved with policies of a violent austerity and extreme fiscal adjustment, but require a policy in coordination with the European Central Bank for the restructuring of the debt, the reduction of borrowing costs and some growth measures."

When asked by reporters about the current policy, Katseli, who left PASOK earlier this year to form the Social Pact party but failed to get elected in Parliament, said: «Unfortunately errors are still being committed. And now that the country is facing the same problem it has faced over the last couple of years, the problem of debt manageability and sustainability is not being tackled; the measures taken instead increase the problem and lead the country to a deep recession, greater unemployment and deficit growth."

Roumeliotis has already testified to the two financial prosecutors, while in the next few days former PASOK ministers Gerasimos Arsenis (who is Katseli's husband) and Vasso Papandreou, as well as former government officials Giorgos Zanias and Petros Christodoulou will be invited for testimony.