ECONOMY

Government racing against time

The government has entered a race against time in order to implement the reforms required to kick-start the economy and render the public debt sustainable, with August and September being crucial for the success of the program, according to Finance Minister Evangelos Venizelos.

He also promised new regulations to support the financially weak, to help the cash flow of banks, and about letters of guarantee.

Venizelos told Parliament on Wednesday that from the date of the agreement at the eurozone summit last month and up to early October, ?a transition period started during which we have to render our public debt sustainable in the long term in cooperation with our partners.?

Including the ministry?s bill that is currently under discussion in Parliament, the process will have to be quick and successful: ?August and September will need to be exemplary in terms of speed,? Venizelos said in response to criticism that the draft law is being rushed.

?We are inside an international maelstrom and we need to make the most of the opportunities we create for ourselves, be punctual with our loan obligations and apply what we have committed ourselves to,? he stated. The bill includes significant structural changes, special tax regulations as well as adjustments to the legislation on tourism and games of chance, which offer significant revenues to the state, said Venizelos.

He stressed that there is ?absolutely no problem with the funding and the cash flow of Greek banks or their capital adequacy. We have set aside 30 billion euros for their recapitalization, and their liquidity is safeguarded by the decisions of the European Central Bank.?

Venizelos also said talks on private sector involvement in Greece?s second aid package would be completed by early October, as the International Monetary Fund warned that discussions between Greece and its creditors must conclude quickly and with a ?high participation? from creditors to ensure that efforts to rescue the country succeed.

Separately, the minister admitted the government bolstered Proton Bank with a deposit on July 14, a day before EU-wide bank stress tests, a decision dictated by ?state interests? owing to a risk of ?negative effects? on the Greek banking system if Proton Bank ?found itself with a financing gap.? Authorities have opened an embezzlement probe into the lender chaired by former US Ambassador to Athens Daniel Speckhard.