Stournaras: Fresh austerity measures would be ‘unnecessary’ and ‘dangerous’

Debt-hit Greece will resist pressure from its lenders for more austerity measures, the country’s finance minister has said while downplaying a discrepancy in projections about the country’s fiscal gap.

“No austerity measures are needed. They are dangerous; we should let the automatic stabilizers work. We are willing to take structural measures with a fiscal impact, but not austerity measures,” Yannis Stournaras told CNBC late Thursday.

“Greece has achieved tremendous progress up to now, people have made huge sacrifices; so we have to be very careful now what kind of measures we implement to close the fiscal gap, if any,” he said.

Late on Thursday eurozone finance ministers meeting in Brussels pressed Greece to speed up structural reforms and continue fiscal consolidation and privatization to unblock more of the international loans that keep its ailing economy afloat.

“The only way forward to strengthen economic perspectives, to strengthen competitiveness, is to follow up on what we agreed, on the commitments that we made to each other,” the chairman of eurozone finance ministers Jeroen Dijsselbloem said after the Eurogroup meeting.

Responding to a question from CNBC regarding the discrepancy in projections about the country’s fiscal gap, Stournaras said: “As an academic, this is not a precise exercise, so we are negotiating.”

Troika inspectors have said that Greece faces a 2 billion euro shortfall in achieving its primary budget surplus target of 1.5 percent of gross domestic product (GDP) in 2014. Greek government officials say the figures is just 500 million euros.

During the interview, Stournaras also brushed aside concerns about the solidity of the county’s conservative-led coalition which last weekend survived a no-confidence vote.

“There is absolutely no risk,” he said, adding that the country has covered 80 percent of the necessary fiscal adjustment.

“We are clever people, now that we’re close to the end, we will not destroy what we have achieved so far,” he said.

An opinion poll published on Thursday showed coalition leaders New Democracy trailing left-wing opposition SYRIZA by 0.5 percent.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.