Saturday March 28, 2015 Search
Weather | Athens
14o C
09o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek finance minister upbeat, says fiscal gap may be avoided

Greece may avoid a budget hole opening up over 2015 and 2016 in contrast to latest forecasts by EU/IMF lenders and its recession will be smaller than expected this year if a bumper tourist season continues, the country's finance minister told Reuters.

Yannis Stournaras's comments in a wide-ranging interview marked the most upbeat assessment of Greece's prospects since the twice-bailed out nation returned to crisis mode this summer, stoking fears of a new flare-up in the eurozone debt saga.

In his office overlooking parliament - where a window still bears a large crack from a bullet fired by angry anti-austerity demonstrators in 2010 - Stournaras confirmed Greece was on track to produce a budget surplus this year before interest payments and said economic risk had abated.

Instead, he said the biggest challenge ahead was mainly a political one tied to austerity fatigue.

"I don't see any economic risk - it's political risk and it has to do with the fatigue of MPs," he said.

"MPs just reflect the average man or woman in the street - they have to believe that there is light at the end of the tunnel. If they believe it they will continue voting the few necessary measures left over, if they don't they are not going to. This is the great risk."

In contrast to the latest projections by EU lenders who predict Greece faces a fiscal gap of around 2 percent of GDP or about 4 billion euros over 2015-2016, Stournaras said Athens's own forecasts, when updated in the fall, may show that there is no such gap to fill.

It was the first time a Greek official has suggested that avoiding a fiscal gap - or a shortfall compared to budget targets - over that two-year period is possible.

"We are running our own forecasts for the medium term so let's first of all see if there is any fiscal gap because you know these things are very sensitive to the growth rates," he said. "And if there is any, we definitely cannot cover it with wage or pension cuts or with tax rises. Any gap should be covered through reforms."

Autumn discussions on how to bridge that budget gap - given Athens is loathe to usher in more austerity - are expected to be the next big test for Greece's shaky coalition and avoiding a gap altogether would be a major boost for the government.

"It is possible," Stournaras confirmed when asked if it was realistically possible to avoid such a gap, adding that a higher growth rate and better budget execution would help.

He also struck an upbeat note on prospects for the country's recession-mired economy, confirming the forecast for a recession of 4.2 percent this year and a return to growth next year, with a further boost if tourism receipts stay at the current pace.

"May (tourism) receipts are much much better than expected, if we continue like this in the months to come then definitely recession this year will be around 4 percent and then next year we will have a positive sign in front of the growth rate," he said.

He declined to discuss further debt relief for Greece - which many analysts believe is inevitable but which Germany says must not be discussed now - saying he had other priorities.

"For me now the main priorities are to have a primary surplus and produce a positive growth rate next year," he said.

"If we have a positive growth rate for one or two quarters and at the same time have a primary surplus then anything is possible - even to tap markets next year," he said.

Once funding from its latest bailout ends next year, Greece may have to take a small loan from its partners but may also be able to tap markets instead given small funding needs, he said.

He expected more interest when a new tender is launched to privatize Greece's state natural gas company DEPA after the first effort failed in June.

A respected economist who became finance minister a year ago, Stournaras has been widely credited for spearheading Greece's bumpy return to fiscal rigor after it nearly went bankrupt and crashed out of the eurozone last year.

At the time, Greece was the eurozone's favorite whipping boy, attacked by all sides for failing to keep pledges to reform and its seemingly unending funding needs, and Stournaras said his first few months in the job were also his toughest.

"You don't want to know what I heard when I first went to the Eurogroup - not only from (German finance minister Wolfgang) Schaeuble but from (Austria's) Maria Fekter and from other people as well," said Stournaras, referring to the Eurogroup of eurozone finance ministers that signed off on aid for Athens.

"But things now are much, much better. Now I have only friends in the Eurogroup and people appreciate the huge effort."

Analysts say Greece is still not out of the woods after six years of recession and repeated rounds of austerity, but Stournaras maintained that Greece was much better off for having avoided the "total disaster" of a eurozone exit, though he acknowledged mistakes had been made along the way.

"There were blood and tears and mistakes done both by Greece and the eurozone - huge mistakes by both. It's not a secret that Greece did not behave according to the rules of a fixed exchange rate system but also it's equally true that the eurozone had no crisis resolution mechanism," he said.

"Now we have both learned our lessons. They were tough, but we are wiser." [Reuters]

ekathimerini.com , Tuesday Jul 30, 2013 (14:34)  
Bank accounts continue to bleed
Hania and Athens are the top picks for Easter visitors
Landlords to pay tax on unpaid rent
Air arrivals grow 20 pct in Jan-Feb 2015
Defense minister Kammenos sues commentator for 1 mln euros
Defense Minister Panos Kammenos has sued commentator Andreas Petroulakis for 1 million euros in damages over a critical article posted on the Protagon website on March 17. In a statement pos...
Reform talks move to Brussels
The Brussels Group, technical teams from Greece and its lenders, is on Saturday due to begin discussing the details of Athens reform proposals, which were completed Friday and will determine...
Inside News
BASKETBALL
Greens live dangerously in Istanbul
Panathinaikos played with fire in Istanbul, but still managed to beat Galatasaray 86-84 on Friday and climb to the third sport of its group two games before the end of the Euroleague top-16....
SOCCER
Greek federation backs injured Holebas
The Greek soccer federation on Friday insisted that international defender Jose Holebas had been dropped from team training in Austria because of injury and not for any other reason. Media r...
Inside Sports
COMMENTARY
Time to get moving
More than two months have passed since the elections and the government has to stop running around in circles and adopt a program of specific reforms, with detailed calculations as to their ...
EDITORIAL
The same old story
One of those infamously bad practices that the political system has been accused of for years is being propagated by the new government today, as it is appointing party cadres and politician...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greens live dangerously in Istanbul
2. Bank accounts continue to bleed
3. Hania and Athens are the top picks for Easter visitors
4. Landlords to pay tax on unpaid rent
5. Air arrivals grow 20 pct in Jan-Feb 2015
6. Cash injection from state debtors
more news
Today
This Week
1. Greek future as trade hub in limbo amid Syriza split on railways
2. Greek gov't denies finance minister Varoufakis to resign [Update]
3. Bundesbank's Weidmann says euro zone debt in 'danger zone,' opposes more aid for Greece
4. New Democracy's political council convenes to decide line opposite gov't
5. Clocks go forward one hour on Sunday
6. Berlin says has no exact information about Greek reforms
Today
This Week
1. Next Monday is D-Day for state funds
2. EU asks Greece for more reforms to speed talks on bailout
3. PM faces Merkel amid race to detail reforms
4. Some more equal than others
5. Greece to present reforms by Monday, says gov't spokesman [Update]
6. EU institutions statement on Greece
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.