Stournaras stresses perseverance with reforms

The Greek government on Monday rejected scenarios of a funding gap and a new haircut on Greek debt next year, reiterating that the plan thrashed out at last November’s Eurogroup still holds good.

“There is no Plan B, everything has been agreed with the Eurogroup,” Finance Minister Yannis Stournaras said in an interview on Bloomberg Television.

“What we’re trying to do now is to produce a primary surplus this year, complete these structural reforms and come back to positive growth rates. If we achieve these, then the rest of our problems will be solved,” he said, stressing that Greece is fully covered for funding until August 2014 and is not concerned about the outcome of German elections next month.

“For the remaining period the understanding is that if Greece satisfies all the preconditions then our partners will agree to cover the financing gap, so this is not a great concern to us,” Stournaras said.

Asked whether the government, holding a slim parliamentary majority, can stick to its austerity policy, he said Athens was primarily focused on efforts targeting a return to growth.

“Further austerity is not a solution to the problem,” Stournaras said. “Now our concern is how to combine further fiscal adjustment with a return to growth.”

He also argued that financial markets had responded positively to the fact that Greece had significantly narrowed its structural deficit, slashing it by 13 percent of gross domestic product since 2009 to 1.5 percent last year.

He reiterated that the country has already covered about two-thirds of its fiscal adjustment effort, saying that although the remaining one-third would not be easy, a return to growth next year would make the completion of fiscal adjustment easier.

Finally, he admitted that the privatizations program had been hampered by delays but pledged that the targets set for the 2013-14 period will be fully met. He said the privatization of the Public Gas Corporation (DEPA), which fell through earlier this year, would be tendered again soon and that all other public assets up for sale would be tendered according to plan.

Separately, the Finance Ministry issued data showing an improvement in budget revenues in July, although figures for the first seven months of the year were considerably short of the set targets.

Revenues collected last month totaled 4.76 billion euros, up 14.3 percent from the same month last year.

“Provisional budget data for July confirm projections that any shortfalls on the revenue side in the first half of the year are manageable. This shows that the national target of a primary surplus by the end of the year is becoming increasingly attainable,” Alternate Finance Minister Christos Staikouras said.

The Finance Ministry statement pointed out that the July revenue figures did not include the amount of 1.5 billion euros from the transfer of the yields of Greek bonds from Eurosystem banks, which was part of the 4-billion-euro installment after the positive assessment of Greece’s partners and the Eurogroup decision of July 8, 2013.

“It becomes evident that the execution of the budget, in an environment of deep recession and record unemployment, allowed guarded but realistic optimism on the revenue side. However, we should reiterate that complacency is out of the question and that a sustained and intense effort is called for. Tax evasion, despite the government’s tangible and continuous efforts, remains extensive,” Staikouras said.