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Greek fiscal survival vital for euro zone: FinMin
July 4, 2011 / 8:46 PM / 6 years ago

Greek fiscal survival vital for euro zone: FinMin

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.

<p>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. REUTERS/John Kolesidis</p>

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.

<p>Greece's Finance Minister Evangelos Venizelos speaks to a Reuters correspondent during an interview in Athens July 1, 2011. REUTERS/Yiorgos Karahalis</p>

“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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