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Athens News Agency: News in English, 10-08-05

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

From: The Athens News Agency at <>


  • [01] No new memorandum, no new measures, FinMin says

  • [01] No new memorandum, no new measures, FinMin says

    Greek Finance Minister George Papakonstantinou on Thursday said the country has secured all tranches of an EU/IMF loan -worth 110 billion euros. Speaking to reporters, after completion of a 10-day inspection visit by troika experts in Athens, the Greek minister said the country will dismiss all negative predictions and noted that "a first assessment of our economic program is positive, there is no new memorandum, no new measures. We will take the third tranche as well. We will take all tranches".

    Papakonstantinou said "the first round has ended", but efforts continued focusing mainly on structural reforms. He named 10 structural changes to be implemented by the end of the year: new tax administration for combating tax evasion, a new state budget, controlling spending and overspending in hospitals and health costs, changes in civil administration and regional authorities, opening up markets and closed professions (lawyers, engineers, architects, pharmacies, accountants, etc), restructuring Hellenic Railways and public sector enterprises, promoting privatizations, better management of the stateās real estate, changes in the banking system, a new business environment and strengthening the competitiveness and inspection of prices.

    Based on a timetable, the troika will release in early September an updated technical report on the Greek economy. In September 10, the IMFās board will meet to approve the release of the fundās participation in the second tranche of the loan. A similar decision is expected by an ECOFIN meeting in September 7. The second tranche, worth 9.0 billion euros, will be released September 13-15. The next official assessment of the Greek economy will be held by the end of October.

    The Greek minister was adamant in his comments that the government will maintain a 51 pct majority stake in Public Power Corporation and rejected talk of selling parts of the electricity utility. He also rejected talk of cutting a 13th and a 14th salary in the private sector and said there was no issue of laying off staff in loss-making public sector enterprises to be merged.

    Papakonstantinou announced a new package of state guarantees, worth 25 billion euros, for Greek banks aimed at strengthening the banking system and boosting liquidity in the market. The expansion of a state guarantee plan by 25 billion euros, totaling 55 billion euros, is a precondition for the release of a new tranche of the loan since "Greek banks continued facing problems in accessing international sources of funding". He said the landscape over the banking system would begin to be clearer by the end of September and indirectly said he was "open" to any investment interest for Hellenic Postbank and ATEbank from abroad.

    He said the government will sign a contract with three major firms which will evaluate the stateās equity holdings in commercial banks, while by September a Financial Stability Fund will begin operating and a restructuring plan for ATEbank will be released. He stressed, however, that no specific timetable for the moves of private banks could be set.

    "The decisions are their own, but within a framework set by the Bank of Greece," he said. He expressed his satisfaction over the results of stress test on Greek banks and reassured that ATEbank was fully safe and that the state fully guaranteed its future.

    Papakonstantinou said he shared the same concerns with the troika experts over any possible risks ahead in implementing an economic program and cutting the fiscal deficit.

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