Friday Jan 30, 2015 Search
Weather | Athens
16o C
13o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Stournaras sees Greek recovery as cash returns

 'People are bringing back their money from mattresses,' FinMin says in interview

By Maria Petrakis & Christos Ziotis

Greek Finance Minister Yannis Stournaras, appointed in June as Greece grappled with political turmoil that threatened to tip it out of the euro, says the economy could begin recovering by the end of this year as investors and depositors regain confidence in the country.

“The most important driver is the reduction of the fear that Greece will leave the euro,” Stournaras told Bloomberg Television’s David Tweed in an interview in Athens Wednesday. “This is the catalyst. Now most people believe that Greece will stay in the euro so people are bringing back their money from mattresses, from abroad to their bank accounts.”

Greece’s economy, which has lost a fifth of its output since 2008, is in the sixth year of a recession after pensions and wages were cut and taxes raised to avert the euro area’s first financial collapse. A turnaround could appear on a monthly or quarterly basis toward the end of this year, Stournaras said. He agreed with an International Monetary Fund forecast of a return to annual growth of 0.6 percent in 2014. The Washington- based lender expects Greece’s economy to contract 4.2 percent this year.

More time

In November, Stournaras secured two extra years until 2016 from euro-area peers to meet European Union and IMF budget- reduction targets. That came after Prime Minister Antonis Samaras’s three-party coalition government fought for and secured parliamentary approval for a 13.5 billion-euro two-year package of budget cuts demanded by international lenders in return for funds that would keep the country solvent and in the euro area.

Euro region finance chiefs agreed in December to pay Greece 49.1 billion euros through March after revamping the nation’s second rescue. That released funds frozen since June as opposition to pension and wage cuts amid surging unemployment peaked, leading to a political deadlock in elections in May.

The IMF is contributing a separate amount to Greece of about 3 billion euros this quarter.

Stournaras, 56, said there was “ample market evidence that confidence is coming back,” pointing to an increase in bond prices and inflows of deposits to banks. Greek bank deposits increased the most in five years in December.

Bullet hole

Still, he said, 2013 will be “a very difficult year”, underscoring investor concerns that social unrest could resume. Samaras on Feb. 5 used an emergency decree to order striking seamen back to work, the second time in as many weeks the government opted for the rare move to break up industrial action. A general strike has been called for Feb. 20.

“We have cut wages, we have cut salaries, taxes are up so this is going to be a very tough year,” he said. “Farmers are in the streets, seamen are in the streets. We’re trying to do our best.”

Stournaras, an Oxford-educated economist and former chief executive officer of Emporiki Bank SA, said he wasn’t alarmed to receive a bullet in the mail at the Finance Ministry earlier this week. He spoke in his office opposite the Parliament in Athens, the scene of three years of demonstrations and protests against austerity measures. A bullet hole is visible in one of the windows of his office.

Locked out of markets since April 2010, the country is the only nation to receive two bailout packages from the euro area and IMF, accounting for half of the 486 billion euros in bailout commitments to the countries sharing the currency who have sought help.

Asset sales

In return for the funds, the government needs to deliver on pledges to overhaul its economy, sell state assets and lower state employee staffing levels by 2015. Stournaras said the sales under way of the natural gas company Depa SA, which has drawn interest from OAO Gazprom, and gambling company Opap SA were the most important.

Greece has to deliver on state asset sales to cut a debt mountain that will peak at 179 percent of gross domestic product this year and threatens the continued payment of funds from the IMF. European leaders have cut rescue-loan interest rates for Greece, suspended interest payments for a decade and given the troubled nation more time to repay, while it carried out a bond buyback last year.

Any further debt relief is “welcome whatever it is,” Stournaras said. “I would welcome a further reduction of interest rates,” he said. “We don’t want reductions which inflict damages to the counter parties.”

European Central Bank President Mario Draghi’s July pledge to do “whatever it takes” to preserve the euro has buoyed demand for European assets, with the euro gaining 2.5 percent against the dollar this year.

Euro strength

While that’s a sign of confidence in the common currency, Stournaras says he was concerned about the high level of the euro, even though that won’t crimp a rebound in Greek exports, which are mostly to other euro-area countries. Pre-bookings for the tourism season were “very good,” he said.

Stournaras said there was little scope to tweak the terms of a 50 billion-euro recapitalization plan for the country’s lenders in the face of calls from the banks for more attractive terms for private investors. He said that setting up a so-called bad bank to take on non-performing loans in the system wasn’t a priority.

Stournaras echoed statements from Samaras in 2012 that the latest batch of pension and wage cuts would be “the last”.

“Don’t forget that the IMF has done its self-criticism by saying that they have imposed too many measures on the Greek economy,” Stournaras said. “I don’t think that further austerity is a solution to the problem. We need now growth and privatizations.” [Bloomberg]

ekathimerini.com , Thursday February 7, 2013 (10:17)  
Greek meltdown splits investors translating Tsipras
Capital flees Greece at fastest pace since 2011
Why Greece went left while Europe turns to right
Greek government´s signals very mixed, ECB´s Jazbec says
Supreme Court prosecutor orders probe into Lesvos bullying incident
Supreme Court prosecutor Efterpi Koutzamani on Friday ordered an urgent investigation into the bullying of a nine-year-old boy on the island of Lesvos who was left to hang in the basketball ...
Monastiraki restaurant fire prompts panic, restricted before spread
Firefighters managed to bring a large blaze that broke out at a restaurant in Monastiraki, central Athens, under partial control by late morning on Friday. The fire service dispatched 21 fir...
Inside News
SOCCER
Olympiakos draws AEK in Cup quarterfinals
The dream draw of Olympiakos vs AEK in the quarterfinal materialized on Friday, as two of the capital's three giants will face off in a two-leg tie for a place in the semifinals of the Greek...
BASKETBALL
Below-par Olympiakos succumbs to Efes
The winning streak of Olympiakos in the second group stage of the Euroleague ended on Thursday in Turkey, as Anadolu Efes outclassed the Reds in the second half to win 84-70. Olympiakos had ...
Inside Sports
INTERVIEW
SYRIZA must come up with ‘pragmatic solutions,’ Schulz tells Kathimerini
“SYRIZA must realize that it is now the Greek government, not a party running an election campaign,” European Parliament President Martin Schulz, the first European official to visit Greece ...
COMMENTARY
Strange haste
The members of the new government must have a lot of confidence in themselves. Several days before announcing his program, Prime Minister Alexis Tsipras and his cabinet have opened up a mult...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greek meltdown splits investors translating Tsipras
2. Supreme Court prosecutor orders probe into Lesvos bullying incident
3. Olympiakos draws AEK in Cup quarterfinals
4. Capital flees Greece at fastest pace since 2011
5. Monastiraki restaurant fire prompts panic, restricted before spread
6. Why Greece went left while Europe turns to right
more news
Today
This Week
1. SYRIZA must come up with ‘pragmatic solutions,’ Schulz tells Kathimerini
2. Why Greece went left while Europe turns to right
3. Greek government's signals very mixed, ECB's Jazbec says
4. EU's Schulz: Greece should follow EU line on Russia
5. Monastiraki restaurant fire prompts panic, restricted before spread
6. Capital flees Greece at fastest pace since 2011
Today
This Week
1. Greek Elections 2015 | LIVE
2. SYRIZA heads for historic victory but without majority
3. Greek Elections 2015 | LIVE
4. Greek Elections 2015: The day after | LIVE
5. Poll shows SYRIZA leading ND by 4 pct
6. SYRIZA's win will test institutions
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.