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FinMin: No further increases planned

Δημοσίευση 31 Ιανουαρίου 2011, 10:15 / Ανανεώθηκε 27 Ιουνίου 2013, 14:55
FinMin: No further increases planned
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The Greek government is not planning further increases, such as in VAT rates, because that would not bring in much more revenues, finance minister George Papaconstantinou assured in an interview with the weekend edition of the Austrian newspaper Der Standard.

The Greek government is not planning further increases, such as in VAT rates, because that would not bring in much more revenues, finance minister George Papaconstantinou assured in an interview with the weekend edition of the Austrian newspaper Der Standard.

He said that Greece has gone through a long and rugged road, and in just one year reduced its deficit by six percentage points while most of the structural changes are progressing or have been materialised, and the country has succeeded in restoring its credibility.

The main concern, now, is to preserve that foundation, the minister added.

To a question on the prospect of a buy-back of state bonds, Papaconstantinou clarified that it is a proposal that is on the table, noting that the proposal was not put forward by Greece and that there is no formal discussion, but it is being discussed as an idea, just like other ideas, at European level.

Asked why Greece will not default and will not restructure its debt, as stressed by Greek prime minister George Papandreou in Davos, Papaconstantinou said it has to do with the tolerance of the public finances, the debts, and this depends on three factors.

The first factor, he elaborated, is the state of the budget, noting that "much has been done here as well, and the direction is correct". The second factor is whether growth is satisfactory in order to reduce the debts "and here, too, all of the government's structural changes comprise a positive support for the economy". The third factor is the size of the interest rates that must be paid.

Papaconstantinou noted that the Greek side hopes for a change of the borrowing terms of the 110 billion euro EU-IMF support loan and an extension of the loan's repayment period, which would be a help and, if it functions properly, will be sufficient to contribute to stabilisation and to reduction of the budget deficit.

In any event, he added, the efforts being made should not be underestimated.