ECONOMY

FinMin vows to meet pledges

The government on Monday reiterated its resolve to honor its commitments to the country?s international creditors, which will involve extensive reforms in the unproductive public sector.

?We have both the will and the steady commitment to implement whatever we have to implement, not just towards the eurozone but towards ourselves and our children,? Finance Minister Evangelos Venizelos told an Economist conference in Athens.

Venizelos said there was a need for rationalization and trimming in the public sector, which should involve the transfer of surplus staff to a labor reserve scheme — and the closure of unproductive agencies, ?this week.?

?We must do within weeks and months what we have not done in years and decades.?

He warned that this week would be ?very difficult? for Greece and the eurozone.

?Greece is not the catalytic problem of the eurozone. The problem of the eurozone is political and institutional, there are internal problems in the member states… if the eurozone cannot definitively deal with Greece?s problem, then it must think with what institutions it will be able to deal with much bigger problems,? he said.

Venizelos said the government had been forced to impose a flurry of emergency taxes, such as a property tax to be collected via electricity bills, because of the inadequacy of the tax collection mechanism. He promised that any injustices thus caused would be rectified in a coming overhaul of the tax system. He said the 2012 budget would focus on cutting spending and the deficit target would be achieved despite the recession, which is projected at 5.5 percent of GDP.

International Monetary Fund representative Bob Traa urged the government to speed up structural reforms and abandon the ?taboo? of dismissing public servants, whose number ought to be reduced by 150,000 by 2015.

He warned that despite impressive progress in cutting the deficit, more measures would be needed to bring it down to a sustainable level.

?The ball is in the Greek court. Implementation is of the essence,? he said, warning that recession would continue into 2012 and recovery would ?not materialize without a reinvigoration of reforms.?