FinMin admits Athens will miss deficit target
?There is no discussion about a default,? Finance Minister Evangelos Venizelos said on Tuesday following a meeting with his eurozone counterparts, though his announcement that Greece will miss its deficit target by 8.5 percent instead of a forecast 7.6 percent, which he deemed as ?reasonable given the projected contraction of the economy by 5.5 percent in 2011,? sent European markets scrambling.
The Greek finance minister was briefing members of the press in Athens on Tuesday following his meeting with Eurogroup ministers in Luxembourg on Monday night where the release of 8 billion euros in assistance funding was postponed after a meeting scheduled for October 13, in which they were expected to sign off on the loan, was cancelled.
Amid growing concern that Greece may ultimately have to default on its 357-billion-euro debt, Venizelos seemed confident of the government?s policy, saying that measures introduced so far have been well received by creditors, though he stressed that meeting the revised deficit target for 2011 will require effort.
?If state mechanisms do not work and if we do not have the national cohesion and solidarity that is required, obviously we may have problems with our 8.5 percent target,? the finance minister said, adding ?the issue is convincing the markets that we have a viable solution.?
?The measures announced by the Greek government were deemed [by the Eurogroup] as impressive and they were widely accepted,? Venizelos said, emphasizing that Greece?s European partners want Athens to focus on structural reforms to the economy rather than relying on fiscal measures alone.
Venizelos said ?we will not need more measures; they are not needed, as long as we are consistent,? urging public sector administrators and citizens to make every effort possible so that the country?s fiscal targets are met, laying stress on widespread tax evasion and the often-lax implementation of reforms at a local administration level.
Parliament has yet to vote on a number of contentious reforms that come on top of widespread cuts to public sector salaries and pensions, an emergency real estate tax and the so-called ?solidarity tax? on incomes, among others, though Venizelos reassured state employees that there would be no delay in the payment of their salaries and pensions this month, even though Athens is not expected to see the sixth tranche of aide released before mid-November instead of mid-October as was expected before Monday?s Eurogroup meeting.
?The aim is for Greece to recover its fiscal sovereignty,? Venizelos told the briefing, adding that ?we are dependant on the assistance of our eurozone partners.?
The Greek finance minister also said that Greece is ready to put up 880 million in bonds as collateral for Finland, which has set terms for its participation in a second Greek bailout.
