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Τετάρτη, 30 Ιουνίου 2010
Greek reforms 'on track' to tackle debt crisis: minister
Speaking to AFP, Finance Minister George Papaconstantinou also argued that Greece's imminent return to borrowing in July with treasury bills after its loan rescue is "no market test" and should have no trouble finding demand.
"The logic is that one should always remain on the market to have reference prices. Failure to roll over short-term obligations does not send a good signal," Papaconstantinou said.
Greek treasury bills worth 4.56 billion euros mature next month.
The planned return to debt markets is Greece's first after it was narrowly saved from default last month by a 110-billion-euro (134-billion-dollar) rescue loan from the European Union and the International Monetary Fund.
Analysts had doubted an early market comeback as lingering uncertainty over Greece's frail economy has kept its borrowing costs at prohibitive levels.
But the minister insisted that next month's T-bill issue was "normal" short-term debt management in line with a strict blueprint agreed with the EU, the European Central Bank and the IMF in return for the recent bailout.
"There is no concern that these kind of obligations will fail to meet demand," he said, adding that longer-term bond issues could be considered next year.
"For five or 10-year bonds we will see next year," the minister said.
Thanks to the EU-IMF loan, Greece "is covered until the first quarter of 2012. We hope to be able to return to the markets earlier, in 2011, but this will depend on the country's financial situation," Papaconstantinou said.
Struggling under debt approaching 300 billion euros, Greece was forced to adopt tough austerity measures that have caused recurring strikes and protests backed by labour unions and left-wing parties.
Seven police officers were injured on Tuesday and six arrests were made after brief clashes on the sidelines of protests in Athens held during a general strike, the fifth since February against the government's policies.
The government needs to show results to its EU, ECB and IMF debtors -- dubbed the 'troika' by Greeks -- to unlock two more nine-billion-euro loan instalments in September and December.
"We are on track," Papaconstantinou said.
"It is not easy, but it is clear that we are completely faithful to a very precise text we have signed."
The ruling Socialists last week tabled to parliament a pension system overhaul that raises the general retirement age to 65 years for both men and women for the first time, in line with the blueprint signed by Greece.
It also increases the period workers must work to get a pension from 37 to 40 years, cracks down on early retirement and cuts pensions by seven percent on average.
The pension reform will be voted into law in July, the minister said.
Earlier measures included unpopular pay cuts for Greece's massive civil service and price hikes in alcohol, tobacco and petrol.
Papaconstantinou acknowledged that "much is demanded" of the Greeks who want to see their "sacrifices" bearing fruit. The mood was likely to darken further after the summer holidays, he warned.
"The problems are there and they are real, and come September families will become aware of the changes," he said.
"This will be our opportunity to show our social dimension and the opportunities for growth," the minister noted.
"After these difficult measures, after the summer we will be able to be more confident regarding economic growth," he said.
The budget deficit fell by 39 percent in the first five months of the year while state revenue rose by over eight percent despite a growing recession, Papaconstantinou said.
A two-point increase in value-added tax effective from July 1 is calculated to bring in additional funds.
Source: AFP Catherine Boitard & Philippe Perdriau