Greece turning a corner on debt

Finance Minister Giorgos Papaconstantinou stressed that the government will achieve its aim of returning the country to growth in a speech he delivered yesterday in Athens. Addressing an event organized by Eurobank EFG, the minister noted that there is now reason to be more optimistic, as, over the last nine months (since the present government came to power), substantial work has been done, he said. «We have seen some huge changes. There are things that have been achieved that, to be honest, if we all went back to a few months ago, I don’t think we could have imagined they would have been accomplished,» he stated. He used as examples recent salary and pension cuts and increases in taxes as some of the painful changes that were however essential for the streamlining program to have any hope of success and for the Greek economy to regain its footing. He also referred to the sweeping structural changes under way, noting that they have already begun to bear fruit, especially as far as the operating expenses of the state are concerned. He did acknowledge that targets on the revenues front have not yet been met, but estimated that in the second half of the year there will be a substantial improvement as «we will have had six months with a higher value-added tax rate and higher special consumption taxes. There will also be some additional revenues from the measures against tax evasion.» The minister did not rule out improvements in the tax framework for enterprises and announced a full restructuring of the tax collection and monitoring mechanisms as of September. Stress tests Papaconstantinou also suggested yesterday that Greek banks will pass the European Union stress tests being conducted to assess how the sector would cope with further economic downturn, saying, «I’m certain that Greek banks will pass these tests intact.» Greece’s central bank chief, George Provopoulos, also said on Saturday he expected the country’s banks to survive the stress tests. Eurobank Chief Executive Officer Nikos Nanopoulos also expressed his optimism, suggesting that the Greek economy can yet prove wrong all those who have been scaremongering. «Our main conclusion is that, despite strong doubts from abroad and an atmosphere of scaremongering, the effort of fiscal adjustment and the structural reforms can be successful and produce the desired outcome, better than originally planned,» he stated. «The time has come for us to build on that preliminary positive image and turn our attention and efforts toward the growth that will see us out of the crisis and provide vision and hope to Greek citizens,» Nanopoulos said. «The main condition for this is the consolidation of a positive investment and growth climate, combined with the stabilization of the economy and the restoration of trust,» he added.

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