FinMin on recession, agreement with Finland

Government Vice President and Finance Minister Evangelos  Venizelos, replying in Parliament to a tabled question by Popular Orthodox  Rally (LA.O.S) party leader George Karatzaferis on the Greek economy, emphasised that "if we fully implement ratified measures and are disciplined we'll be able to improve the environment for the Greek economy in 2012."

Although he admitted that the situation is very difficult and that an ongoing recession will probably mean a drop in GDP by more than 4.5 percent, he nevertheless said efforts underway cannot slacken.

Referring to a recent letter to European and international counterparts, the finance minister explained that what he requested is "for us to send a message that the Eurozone has the possibility to deflect the unbridled and asymmetrical threat by markets." In reference to bilateral negotiations with Finland, the minister clarified that Greece did enter into them alone.

"We received a mandate to attempt a bilateral negotiation so that a decision on the activation of the EFFS be unanimous ... because Finland was headed into elections, where a major issue in the campaign agenda was the provision of guarantees to whatever country.

"If a decision had not been taken on July 21 the markets would have massacred the Eurozone," Venizelos said, while he stressed that Finland rushed to make announcements despite the fact that Athens had made it clear that whatever provision of guarantees should not harm the credibility of the programme.

Banking system

In reference to the domestic banking system, Venizelos underlined that the Greek banking system is absolutely secure and that its funding through the Eurosystem is secured. 


On his part, Karatzaferis charged "that the banking sector has slipped from you and now maybe the mergers may not be enough, because there is no capital adequacy," he said, assessing that only six major domestic companies will remain if the Greek banks find themselves under foreign control.


Finally, Radical Left Coalition (SYRIZA) head Alexis Tsipras, whose party also tabled a question, opined that "something is up" between ruling PASOK, New Democracy and LA.O.S, as the two mainstream parties fear recourse to elections.

Tsipras strongly criticised the government's handling in negotiations on the settlement of the external debt, referring to a "hell that is not being renegotiated."

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