Greek Finance Minister George Papaconstantinou on Wednesday said the country’s public debt was “absolutely sustainable” and categorically rejected -once again- speculation over a debt restructuring.
Speaking to reporters, the Greek minister stressed that “a restructuring carried huge risks for the economy, the banking system, households and enterprises,” and added that “we insist on implementing our program as in market’s mind, the debt’s sustainability depends on the progress of the program”. Papaconstantinou attributed the reaction of markets last Friday when the government unveiled its Medium-term Fiscal Strategy Framework, which pushed Greek bond spreads higher, to speculation of a debt restructuring.
The finance minister noted that the government’s aim was “returning to markets the soonest possible and definitely in early 2012” and said there were two alternative solutions to covering interest payment needs totaling 27 billion euros next year: Either the market returns to markets if spreads are not prohibitive, or seeking funding from a European Financial Stability Mechansim. “No one intends to lead Greece into a dead-end,” Papaconstantinou said and announced that diaspora bonds for Greeks living abroad would be launched after June.
A goal of raising 15 billion euros from privatizations in a period of three years was “absolutely feasible” and noted that the goal of raising 50 billion euros by 2015 would be covered largely by exploiting the state’s real estate property.
A group of experts from the troika will visit Athens in early May, followed by the heads of the troika in mid-May, in order to finalize certain fields of the Medim-term Fiscal Strategy Framework. Papaconstantinou said there won’t be additional cuts in wages and pensions, or VAT increases. He said that the ministry will present an action plan to combat tax-evasion by the end of next week.