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Athens News Agency: News in English, 10-08-09

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

From: The Athens News Agency at <>


  • [01] FinMin: Everything in due course
  • [02] European Commission, IMF: More still to be done

  • [01] FinMin: Everything in due course

    ANA-MPA/Next year will be a year of 'hard work' for the government, finance minister George Papaconstantinou said in an interview, referring to the big wager of restarting the economy, while he also stressed categorically that new measures are not anticipated with respect to revenues, or additional cuts in remuneration but, rather, the government was looking to completion of the major structural changes.

    In an interview with the financial newspaper Isotimia appearing on Saturday, Papaconstantinou said that the salary developments in the private sector were set out in the Collective Labor Agreement recent agreed between the social partners. "It is already known a new framework exists for the regulation of labor relations, which is being advanced by the relevant ministry, and no abolition of the 13th and 14th salary (half-salary Easter and summer vacation bonuses and full-salary Christmas bonus) are foreseen in that framework," he said.

    On speculation of a prospective government reshuffle, Papaconstantinou said that the formation of the governmental scheme that must carry out this immense project is the responsibility of the prime minister, and it is the premier who assesses the needs with respect to staffing the government and the performance of each individual minister in implementing government policy. He added that the smooth implementation of the policy set out in the Memorandum, but also of the overall policy of the government, is not the responsibility of only one minister but a collective effort for achieving the many and varied targets that have been set out for the country's overall progress.

    Asked whether the Memorandum or the government's pre-elections program is the 'bible' for ruling PASOK, Papaconstantinou noted that "a more fair taxation system, putting the country's finances in order with major changes with respect to the budget and fiscal management, the opening of the closed-shop professions, reduction of bureaucracy, acceleration of the NSRF (National Strategic Reference Framework) investments, facilitation of entrepreneurship, the Kallikratis program, the creation of a viable social security system and a series of other policies that are contained in the Memorandum and which the government has already instituted and is materialising or have been planned with strict timetables for the coming period were all included in PASOK's pre-electoral commitments.

    On the cooperation with the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) 'troika', Papaconstantinou said the cooperation itself was an unprecedented procedure not only for Greece but for the three participating organisations themselves because, although the EC, ECB and IMF have collaborated many times with such interventions in other countries, this is the first time that such a large loan agreement and such a wide-ranging program is being implemented and, indeed, in a eurozone country at that. "All these create many restrictions for everyone and have led to necessary decisions for everyone. However, a categorical evaluation of the program - positive or negative - is not easy, especially this early on. Besides, the program itself is a dynamic process, and the main 'shareholder' of the program is the Greek government," the finance minister added.

    On the privatisations program, Papaconstantinou stressed that from here on and until the end of the year, there will be specialisation of the moves in some sectors, with priority on those sectors that have major structural problems, such as the Hellenic Rail Organization (OSE) for example, for which a restructuring plan is being prepared, but also in areas that have substantial prospects for regulation of the market and boosting state revenues, such as gaming.

    Asked when the country will return to the international markets for borrowing, Papaconstantinou said that "we will not have a practical need for returning to the markets until the end of next year, and this gives us a margin of time to carry on with our program, to restore the credibility of and confidence in our economy to the degree possible and therefore to return to borrowing on the markets at a time when we will be able to secure better terms...consequently, there is no specific date at this time, everything will be done in due course".

    [02] European Commission, IMF: More still to be done

    European Commission (EC) Deputy Director General for economic and financial affairs Servaas Deroose and International Monetary Fund (IMF) European Department deputy director Poul Thomsen, who headed the EC and IMF teams in Athens last week, praised the progress so far in the Greek economy, in interviews appearing in two Sunday newspapers, but also stressed that there is still much that needs to be done.

    In an interview with Ethnos newspaper appearing on Sunday, Thomsen stressed that there is no need for new measures this year, neither with respect to expenditures nor with respect to revenues, and voiced optimism that the fiscal targets for September and December will be met.

    Deroose, in his own interview with To Vima appearing on Sunday, said he was impressed with the progress to date, adding that Greece is changing and that "a revolution is in process".

    Both men clarified that the troika (EC, IMF and European Central Bank-ECB) have never asked, and are not asking, for the sale of Public Power Corporation (PPC) units, nor has it asked for dismissals in the public sector and the DEKO (public utilities and organisations), while Poul spoke of a social choice of the government, which is respected, but both stressed that the commitment for one hiring per five outgoing personnel must be adhered to.

    Deroose also stressed that there will be no restructuring of Greece's debt, belying local and foreign speculation.

    The way to reducing the Greek debt by half, according to Deroose, is first of all for the country to achieve a primary surplus of 5 percentage points of GDP and the reforms must result in 3 percent growth. He considers both these targets absolutely feasible and, in such a case, the debt will be halved from its present level in a decade.

    On the deficit, he said that if it falls to below 8 percentage points of GDP this would send a very strong message to the markets that the program is successful and functional. He warned, however, that the measures taken must not be reversed, such as reinstatement of the so-called 13th and 14th salaries. "That would not be wise," Deroose said.

    Tackling the thorny issue of tax evasion, Thomsen said that a fairer program is necessary that will tax the higher incomes. He does not believe that the tax rates need to be increased beyond what is foreseen in the Memorandum, but that the program must be strictly implemented. What is important, he continued, is that the political will exists to impose adherence to the law, and agreed with imprisonment in cases of large-scale tax evasion.

    Replying to a relevant question, Thomsen said that the political consensus on implementation of the Memorandum was not to the degree he hoped for, while Deroose, in reply to a question, denied press reports that the troika has prohibited early general elections. "That is wrong," he said, adding that "it is not our job to suggest if and when elections will be held in a country to which we are providing assistance".

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