ECONOMY

Recession forecast continues to deteriorate

The Greek economy is likely to contract at an annual pace of 3.9 percent this year, slightly more than previously forecast, before returning to growth in 2012, Finance Minister Evangelos Venizelos said on Friday.

In an interview with Reuters, Venizelos said that the country would benefit from frontloading available European Union funds and cutting bureaucracy to help businesses.

?This is our obligation, our hope and our target: to return to growth next year. Because without growth it is not possible to achieve our strategic targets,? he said.

The comments came a day after the Greek Parliament approved the second of two sweeping austerity bills that cleared the way for the EU and the International Monetary Fund to release a 12-billion-euro loan tranche Athens urgently needs to stave off bankruptcy.

After being put in charge of the Finance Ministry last month in a cabinet reshuffle, Venizelos said his top priorities were to reform an inefficient tax system and launch an ambitious privatization plan slated to rake in 50 billion euros by 2015.

?The prime minister and I can coordinate the system in an fast and efficient way,? he said. ?Implementation is difficult, of course. This is why we cannot waste a single hour. I have instructed my staff that each day must count for a month.

?We will set up immediately the sovereign fund for privatizations to achieve the target set for this year and until 2015. The 2011 target is feasible because it involves assets that are not burdened with complicated legal issues,? Venizelos said.

The minister said gross domestic product would contract by 3.9 percent this year, more sharply than the previous government forecast of -3.5 percent, and unemployment would reach 16-17 percent this year.