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Athens News Agency: News in English, 10-06-11

Athens News Agency: News in English Directory - Previous Article - Next Article

From: The Athens News Agency at <>


  • [01] FinMin: Econ program progressing well

  • [01] FinMin: Econ program progressing well

    Finance minister George Papaconstantinou said on Friday that the second and third tranches of the EU-IMF support mechanism loans for the Greek economy are ensured.

    Speaking in parliament in reply to a current question tabled by Popular Orthodox Rally (LAOS) leader George Karatzaferis, the minister stressed that the sum of 110 billion euros, the first installment of which was received by Greece last month, is an inalienable part of the EU support for the Greek economy.

    Papaconstantinou, who outlined the government's actions through the end of June, said that a European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) team is due to arrive in Athens on Monday for the first quarterly progress report on the jointly-agreed three-year economic restructuring program so as to enable disbursement of the second tranche of the loan in September.

    The minister stressed that the program was progressing well both with respect to results and the timetable, citing a very substantial 39 percent reduction of the country's deficit in the first five months of the year. He explained that the reduction was the result of a more than 8 percent increase in budget revenues which, although just short of the target, was more than counterbalanced by a very substantial reduction in expenditures that exceeds 10 percent, which is much above the target.

    "Consequently, we are reservedly optimistic that, continuing at this rate and knowing that nothing has been won until the end of the year, we will attain the targets that have been set out for a 40 percent reduction of the deficit from 13.6 percentage points of GDP to 8.1 percent. We are proceeding well also with respect to materialising the commitments we have undertaken," Papaconstantinou said.

    The minister explained that, in this first evaluation (progress report), the Greek government mush show that it has materialised approximately 28 actions that it has committed to, adding that the overwhelming majority of those actions have either been taken or are already in progress, "so that there will be no risk for their completion before the end of June, which is the expiration date of the first evaluation".

    In that context, he announced that the bills on fiscal responsibility, on the establishment of the Fiscal/Credit Stability Fund and an interior ministry bill requiring the publication on the internet of all expenditure decisions will be tabled soon in parliament.

    The minister further said that a series of bills are ahead of the timetable, citing as an example the bill on reform of the social security system, which the government is required to table in the autumn but which will be tabled within the month.

    Turning to the Greek banking system, he said that it needs to adapt and also to seriously consider "what we are doing regarding the public aspect" and how it will be strengthened in the coming period through specific strategic moves so as to be able to continue, in an extremely competitive international environment, to be a vehicle for growth in the country, in a fair way for the citizens, with proper services without excessive profit and with an attitude that will render it a support of the Greek society, as it has in the past.

    Papaconstantinou said that the Greek banking system is fortified and has limitless liquidity from the ECB, while the creation of the new Fiscal/Credit Stability Fund will further shore it up so that liquidity will return to the real economy. He added that there has also been a small, "timid" increase in lending, which he said is very important.

    The minister further stressed that various rumors and speculations that have recently intensified are a "scourge" for the country, attributing them to two reasons: those who have not understood that the eurozone is not breaking up, no country will exit the euro, no country will default, and those who have invested in such an eventuality and are waiting to make money from it. "Simply, the will lose their money," he warned.

    To a reference on recession contained in Karatzaferis' question, Papaconstantinou cited the GDP figures for the first quarter of the year indicating that growth has fallen by 2.5 percent against a forecast of 4.0 percent, "indicating that things are perhaps better than we had predicted".

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