Saturday October 25, 2014 Search
Weather | Athens
19o C
12o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greece not out of woods, finance minister says

By Dina Kyriakidou

Greece must resist internal political pressure to slow economic reforms in a year that will dictate whether it avoids bankruptcy, Finance Minister Yannis Stournaras told Reuters in an interview.

With EU partners starting to praise Greek efforts to exit its worst crisis in decades and some economic indicators showing fledgling signs of recovery, demands are increasing on the government to give up crippling austerity and reforms.

"What scares me is the big pressure from society, media and parliamentary deputies from all parties to ease the program. We must resist ... it's too early to declare victory," he said from his office on Syntagma square overlooking parliament.

Stournaras, an economist recruited by Prime Minister Antonis Samaras's conservative-led coalition after it won elections in June, said there were signs Greece was starting to exit the three-year debt crisis that shook the euro zone.

Money is returning to Greek banks, bond prices are rising and the 2013 primary budget will do better than the troika of international lenders predicted for the year, registering a 0.4 percent surplus, despite a crippling recession.

"The primary deficit is what we are judged on. The troika expects it at zero but we believe we will do slightly better," he said. "This means that there is a good chance our partners may further reduce our debt."

The International Monetary Fund agreed on Wednesday to pay the next aid tranche under the country's 240-billion-euro international bailout and said Athens was moving in the right direction. But IMF chief Christine Lagarde urged it to do more to boost productivity and lower prices.

Greece's euro area partners agreed last year to extend the maturities and reduce the interest on the nation's bailout funds to help cut its debt mountain to a more sustainable level of 124 percent of GDP in 2020, from an estimated 173 percent this year.

More debt relief might follow if Greece hits its fiscal targets and posts a balanced budget in 2013, they said.

Stournaras ruled out this including another debt buyback and said there was no discussion of a haircut of the country's debts to its euro area partners. Debt reduction may instead come in other ways such as cutting interest rates, he said.

He acknowledged unemployment, the euro area's highest at 26.8 percent in October, would take longer to start declining and only after the economy starts to grow, which is expected in late 2013. GDP is expected to decline 4.5 percent this year, the country's sixth consecutive year of contraction.

"Unemployment is our big thorn," he said. "There is a time lag between GDP growth and unemployment decreasing and it's a serious problem, both economic and social."

A public fed up with waves of tax hikes and salary cuts has taken to the streets, in often violent protests, and lashed out at politicians they hold responsible for the crisis.

Stournaras, who served as chief economist for the socialist government that brought Greece into the single currency in 2001, said people must show patience and solidarity for one more year.

"We are facing a huge crisis, we have not yet left the hot zone of bankruptcy, he said. "We are doing better but we can't say that we have escaped all danger. The year 2013 will determine whether we will."

Greece expects to meet this year's privatization revenue target of 2.6 billion, with investor interest coming mainly from China and Russia for state companies going on the block, including natural gas distributor DEPA and gambling firm OPAP, Stournaras said.

The banking sector has almost completed its consolidation through a wave of mergers and may not need all of the 50 billion set aside from Greece's massive international bailout for bank recapitalization.

"Synergies from mergers have not been taken into account - National with Eurobank, Alpha with Emporiki, Piraeus with Agricultural and General. In the end, they may need less than 50 billion," Stournaras said.

It will be more difficult to keep the lenders in private hands as investors seem reluctant to put up cash for the 10 percent requirement to avoid nationalization.

Stournaras said the government did not want to manage state banks but would take them over if needed, not to run but supervise them.

"If the crisis has taught us something, it's that supervision was lacking, said Stournaras, who has also served as head of Emporiki bank.

The minister dismissed concerns the shaky ruling coalition may buckle under pressure, saying Samaras and his junior leftist partners were fully committed. The government has seen its majority in parliament fall as deputies have been leaving in protest of harsh legislation.

But he said he was more fortunate than others in the government because, as a technocrat, he did not have to face a political cost.

"I'm not a politician and that's an advantage in a crisis, Stournaras said. "Right now, I am under pressure from media, social groups, professional groups, special interest groups and even MPs on whatever you can imagine -- not to shut down tax offices, to lower the tax on heating oil, to raise salaries, to relax the program.

"I will not be the one to destroy what we have achieved with sweat and tears in the last six months," he said. "Credibility is very hard to build and easy to lose." [Reuters]

ekathimerini.com , Thursday Jan 17, 2013 (15:47)  
TAIPED waits for green light from Eurostat
Trade deficit shrinks on big drop in imports
SMEs unable to claim subsidies
Taxes kept growing in second quarter
Athens, Nicosia satisfied by EU leaders stance toward Ankara
A reference in Fridays European Council conclusions calling on Turkey to respect Cypruss sovereign rights left Athens and Nicosia content with the outcome of the European Union leaders su...
Suspended policeman chief suspect in cousins murder
A 27-year-old police officer who has been suspended from duty since 2013 for extortion, is being treated as the chief suspect in a murder committed in a suburb of Piraeus on Thursday. Police...
Inside News
BASKETBALL
A win is a win is a win for Olympiakos
A bad Olympiakos defeated a worse Laboral Kutxa 63-57 to make it two out of two in the Euroleague on Friday. In a game where the two teams had an overall field goal rate of about one in thre...
SOCCER
Panathinaikos snatches point at Eindhoven
Panathinaikos offered its fans a glimpse of its glorious past in European competitions snatching a draw at PSV Eindhoven, on an otherwise bad night for Greek soccer in the Europa League, as ...
Inside Sports
COMMENTARY
End of reason, end of humanity
The effects of a slew of new and increased taxes introduced since the start of the crisis were first observed in the wages of those still fortunate enough to have jobs, who saw their take-ho...
EDITORIAL
Banks need to step up
What has been leaked so far regarding the results of the stress tests on Greeces lenders, which are due to be published on Sunday, appears positive. Greece needs a healthy, private banking ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. A win is a win is a win for Olympiakos
2. TAIPED waits for green light from Eurostat
3. Trade deficit shrinks on big drop in imports
4. SMEs unable to claim subsidies
5. Taxes kept growing in second quarter
6. Thessaloniki Port expects 2014 to be record year
more news
Today
This Week
1. Banks need to step up
2. Woman killed in tram accident in Floisvo, south of Athens
3. Clocks to go back 1 hour on Sunday
4. Venizelos slams Turkey for 'flagrant violation of international law' off Cyprus
5. ECB vies for third time lucky in European stress tests
6. Cyprus GDP upgrade seen as boosting bailout exit plans
Today
This Week
1. The past, present and future of the Greek debt crisis
2. Greeces closed society is central to its current malaise
3. Greece must stick to reforms, says Schaeuble
4. At least 11 banks to fail European stress tests, three in Greece, report says
5. Cyprus to block Turkey's EU talks after EEZ violation
6. Stop moaning and get in the game
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.