NEWS

Gov?t plays down need for austerity

The government on Monday sought to play down fears of new austerity measures as auditors from the European Commission, the European Central Bank and the International Monetary Fund, known as the troika, returned to Athens for talks on a new bailout package for Greece. But it was all too clear that targets set by creditors remained out of reach.

Finance Minister Evangelos Venizelos told a press conference that no new measures would be necessary if budget targets were met. Even if the targets are missed, Venizelos said, there would be no new tax increases. Revenue would be raised by cutting spending.

?There is no question of whether we can increase taxes further; we can?t,? he said. ?There is no question of whether we must cut spending more; we must,? he added.

Noting that the past few months had been a ?constant, anxious struggle to keep the country on its feet,? Venizelos described a new budget, voted through Parliament last week, as ?very difficult.?

According to ministry statistics, there are still loose ends from the budget for 2011. In the next 20 days, authorities must find a way of raising 8.3 billion euros in revenue.

Venizelos did not dwell on this near-impossible task on Monday but sought to send a message to all political parties focusing on early elections. ?This burden, the assessment of the execution of the budget will have to be carried out by the next government,? he said.

A report compiled by the EC proposes several areas for spending cuts including in the health and defense sectors. It also calls for the abolition of more tax exemptions.

According to sources, some of the 7 billion euros? worth of austerity measures the EC has called on Greece to take in 2013 and 2014 might have to be implemented in 2012 to make up for this year?s budget shortfalls.

Venizelos also had talks in Athens on Monday with Charles Dallara, the head of the Institute of International Finance, a group representing Greece?s private creditors, which were ?constructive,? he said.

A bond swap foreseeing creditors taking a 50 percent writedown on Greek debt, should be completed by the end of January, Venizelos said.

Labor and Social Insurance Minister Giorgos Koutroumanis also struck a reassuring tone on Monday, quashing speculation that the troika was set on abolishing the 13th and 14th salaries in the private sector. The two additional salaries — disbursed in the form of a bonus on major holidays — were abolished in the public sector last year.