Greek fiscal survival vital for euro zone: FinMin

ATHENS Mon Jul 4, 2011 6:27pm EDT

1 of 2. Protesters shout slogans during a rally against the austerity economic measures and corruption in front of the parliament at Syntagma (Constitution) square in Athens June 26, 2011.

Credit: Reuters/John Kolesidis

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ATHENS (Reuters) - Greece will stave off default not only for its own sake but because its survival is vital for the euro zone and the global economy, Greek Finance Minister Evangelos Venizelos told Reuters on Monday.

With help from its EU partners and fresh determination, the debt-ridden euro zone member will regain its fiscal sovereignty as soon as possible and aims to return to markets in the middle of 2014, as expected, the minister said.

"We will make it, because this is vital not only for Greece but for the stability of the whole euro zone and the global economy, because in Greece the stamina of the financial system is being tested," he told Reuters in the second part of an interview.

Appointed in a June 17 reshuffle and speaking after euro zone finance ministers approved on Saturday a critical, fifth tranche of a bailout loan to avert default, Venizelos said he was grateful to EU partners and vowed to fulfill his obligations.

He said he would redouble efforts to raise 1.7 billion euros ($2.5 billion) in privatizations by September, as agreed with the EU and the IMF who pulled Greece back from the brink of bankruptcy with a 110 billion-euro bailout a year ago.

Greece must deliver 50 billion euros in proceeds from a massive and complicated state selloff by 2015, including 5 billion this year. So far, in 18 months in office, the socialists have yet to launch any privatizations.

Amid the worst recession in nearly 40 years, good news for the economy comes from the tourism sector, which makes up about 15 percent of GDP. Revenues are seen rising by about 10 percent this year after a 25 percent slump in 2009-2010, Venizelos said.

"The data we have so far from the Tourism Ministry and the Bank of Greece are encouraging that it will be a good year. Revenues will rise by about 10 percent," he said.

A tough political veteran who has held several portfolios and prepared the 2004 Olympics, Venizelos took in his stride comments by Eurogroup chief Jean-Claude Juncker that Greece's sovereignty must be severely limited during the bailout program.

"Mr. Juncker is a great Philhellene (friend of Greece)," Venizelos said. "He doubtless wants to always help Greece and the euro zone overcome its problems and, primarily, to avoid systemic dangers.

"There is no doubt we have very tough fiscal limitations and we must restore our fiscal sovereignty as soon as possible through the successful implementation of our program," he added.

FOREIGN INSPECTORS

Venizelos denied suggestions foreign inspectors would be placed in ministries to check progress.

"There will be no inspectors," he said. "We can all resort to the knowhow and expertise of the EU and other member states. This does not mean inspectors will be posted or that responsibilities will be removed from the Greek parliament, the Greek government or the Greek public administration."

Venizelos said selloffs and the reform of the tax system were among his top priorities and that he would lay out a detailed plan to fight chronic tax evasion and improve tax collection, which has fallen behind target, next week.

Greece has 20 days from Saturday to set up a privatization body and Venizelos said he would unveil its board to fellow Eurogroup ministers on July 11.

"I will announce this after I complete discussions with the opposition on the 2-3 key people, because we need the widest possible consensus," he said.

The conservative opposition has opposed the bailout, drawing criticism from EU officials, but says it agrees with some parts of the privatization plan, raising hope some political consensus can be reached.

International lenders are working on a plan to provide Greece with an additional 110 billion euros to avoid default which could hit European banks and other lenders.

Asked about a warning by the S&P rating agency that banks' plans to roll over Greek debt could be seen as default, which drove down the euro on Monday, Venizelos said it was crucial that any model included the strictly voluntary participation of private lenders.

"As markets are strict and merciless, we want the format that results from the next program to have a shape that is accepted by markets and they react positively," he said.

(Editing by Peter Millership)

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Comments (3)
divinargant wrote:
I would hardly expect the man to say differently. Of course he is not going to divulge what will inevitably come to pass since that is simply not what politicians do. The numbers simply do not lend themselves toward a favorable outcome for Greece and most people know why this playing out as it is. Most people that are following this know that this will eventually blow up, and the more time that passes without a true restructure the larger that explosion will be. They can’t borrow their way out of this because they have no prospects now for future growth with further austerity coming down the pipeline. That’s just the cold hard reality of it all. That’s it.

Jul 04, 2011 6:38pm EDT  --  Report as abuse
Pavlov wrote:
“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. This issuing power should be taken from the banks and restored to the people to whom it properly belongs. If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered. I hope we shall crush in its birth the aristocracy of the moneyed corporations which already dare to challenge our Government to a trial of strength and bid defiance to the laws of our country” Thomas Jefferson, 1791

Jul 04, 2011 8:54pm EDT  --  Report as abuse
Trikeriotis wrote:
I doubt that mr. Venizelos has the IQ and the team along with the know how and the time to do what he claims. Once more history will show that the Greek government CANT do what they say and promise. Today it is July 5th and a few working days are left to do what he claims and in August many people will go on some type of a holiday which makes things even more complicated and selling complicated and non transparent government companies in a country which is famed for its obsticles of doing business, i wonder how and to who these 5 billion worth of assets will be sold.
Only one possible buyer could act so fast and that is the network of other Greek companies which are “in the system” where the assets will be sold for far less that they are worth and with many deals under the table with millions going once more to the various thiefs.

The EU members simply dont get it and if they do at this stage there is not much that they can do exept of keep putting more money for now.

Jul 04, 2011 11:38pm EDT  --  Report as abuse
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