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Greek debt will last a generation

Tuesday, August 02, 2011 - 02:00

Aug. 2 - The Greek finance minister says Greece will soon return to growth although privatizations are ambitious, while the OECD says it will take a generation to cut Athens' debt down to more sustainable levels. Sonia Legg reports

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It's not easy to get to the Transport Ministry in Athens at the moment - striking taxi drivers are blocking the streets outside. They're unhappy about reforms that will open up their trade. But it's exactly that sort of change Greece must implement now its taken a second bailout from the euro zone. The rescue package will only reduce the country's debt slightly - it'll take a generation of cuts and reforms to reduce the rest to sustainable levels. That - at least - is the verdict of the Organisation for Economic Cooperation and Development. Angel Gurria - it's head - spoke exclusively to Reuters. (SOUNDBITE)(English) HEAD OF THE OECD CLUB OF INDUSTRIALISED NATIONS, ANGEL GURRIA, SAYING: "First of all you have to get your public finances in order, no doubt about that. Second there has to be an improvement in terms of competitiveness and third there has to be a very important re-organization in some areas of the public administration, including by the way taxation and the way taxes are collected." Greek debt in 2010 was 140 percent of GDP. The OECD report suggests it could be cut to 60 percent by 2035 if Greece can raise 50 billion euros from privatisations over the next four years. If it can't - a debt to GDP ratio of 100 percent is more likely. Gurria called the Greek government's efforts over the past year "impressive." The country's Finance Minister Evangelos Venizelos said he was delighted with the vote of confidence. (SOUNDBITE)(Greek) GREEK FINANCE MINISTER EVANGELOS VENIZELOS SAYING: "Greece can get out of the crisis, break the vicious cycle, escape the fiscal turbulence and return soon, in the visible future, to positive growth rates." But the report says Athens is still not doing enough to open up closed professions and the job market. These taxi drivers perhaps illustrate why. Sonia Legg, Reuters.

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Greek debt will last a generation

Tuesday, August 02, 2011 - 02:00