ECONOMY

Gurria calls for debt reduction

Greece’s creditors must find a solution to make the country’s debt sustainable “as soon as possible,” the secretary general of the Organization for Economic Cooperation and Development (OECD), Angel Gurria, said in a meeting with Prime Minister Antonis Samaras in Athens on Wednesday, during which he delivered the latest OECD report on Greece.

“We are half a decade into the longest, deepest economic crisis that we have known,” Gurria said. “But there is hope on the horizon: 2014 promises to be a turning point for Greece,” he added, though the OED report predicts a 0.4 percent contraction in the economy next year. Greece and its creditors anticipate a 0.6 percent gross domestic product rebound in 2014.

“I hope I am wrong and the [finance] minister right,” said the 63-year-old Mexican economist.

The OECD report expects the Greek debt to reach 157 percent of GDP in 2020, against a target for 124 percent, due to deflation and the size of the recession, stressing that further action is needed to lighten the load. “One more request. And I will make it in capital letters: Let’s do it as soon as possible,” said Gurria, calling for a reduction to the country’s debt.

Gurria also referred to the reduction of the budget deficit by as many as 9 percentage points from 2010 to 2012, saying that this constitutes the biggest adjustment made by an OECD member state. He added that the financial crisis has had a long-term negative effect in four areas: Low growth, high unemployment, social inequality and shaky confidence.

The report includes a series of policy proposals such as the acceleration of reforms, intensification of efforts to beat tax evasion by abolishing tax amnesties and improving inspections, the lifting of a ban on private universities, the introduction of low tuition fees for postgraduate students, targeted social benefits and the introduction of a minimum guaranteed annual income.

The OECD further identifies 555 problems in market operation, with Development Minister Costis Hatzidakis saying that the government will introduce laws adopting some 80 percent of the relevant recommendations.