Sunday March 1, 2015 Search
Weather | Athens
11o C
6o 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)  
Greece seeks negotiations on ECB bond repayment
Piraeus plans are coming in next few weeks
Slowdown in tourism bookings from Germany
Economy grew by 1.3 pct in Q4 of last year
Alleged accomplices of N17´s Xeros caught in Athens
One man was arrested and another detained in Athens on Saturday in connection to the November 17 terrorist Christodoulos Xeros, who was recaptured in January after a year on the run. Accordi...
Hellas Gold and workers react to Greek gov´t decision on plan permit
Hellas Gold and its workers at the gold mine in Skouries, Halkidiki, have vowed to take legal action after the government announced on Friday that it would be recalling the permit for a proc...
Inside News
BASKETBALL
Spanoulis leads Olympiakos to win over Malaga
A good second half was enough for Olympiakos to get the better of Unicaja Malaga (77-72) and score its seventh win in eight games at the second group stage of the Euroleague on Friday. Playi...
SOCCER
Ten-man Olympiakos couldn´t overcome Dnipro
Olympiakos drew 2-2 with Dnipro from Ukraine at home on Thursday, playing almost the entire second half with a man down, to bow out of the Europa League, despite facing an opponent which on ...
Inside Sports
COMMENTARY
A unionist agenda
Maybe Greece will not experience a credit event, “because it is in no one’s interest,” as Minister of State for Coordinating Government Operations Alekos Flambouraris recently assured. Maybe...
EDITORIAL
The beguiling limelight
Too much media exposure is never a good thing and there is no shortage of newcomers in politics who are beguiled by the limelight. What usually comes after this thrall of publicity is the in...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Alleged accomplices of N17´s Xeros caught in Athens
2. Hellas Gold and workers react to Greek gov´t decision on plan permit
3. Greek ministry says teacher hirings to continue via ASEP
4. Women conned elderly Cretans by posing as church representatives
5. Spain, Portugal sought to trip up gov’t, Tsipras says
6. Police nab Kavala man over homegrown cannabis
more news
Today
This Week
1. Greece seeks negotiations on ECB bond repayment
2. Spain, Portugal sought to trip up gov’t, Tsipras says
3. A unionist agenda
4. Hellas Gold and workers react to Greek gov't decision on plan permit
5. Greek ministry says teacher hirings to continue via ASEP
6. Women conned elderly Cretans by posing as church representatives
Today
This Week
1. Time for Alexis Tsipras to keep his nerve
2. Greek bailout deal faces review by euro officials next week
3. Greece says eurozone deal won time as cash bled from banks
4. The ignorance of the West about the culture of Islam
5. A fierce battle looms
6. Spain said to lead push to hold Greece to terms as Podemos grows
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.