The Greek government will send letters to the European Central Bank, the IMF and the European Commission explaining in detail all the new measures and political commitments taken by the government to achieve its goals, Finance Minister Evangelos Venizelos said on Tuesday.
Speaking to reporters after his return from Washington, the Greek minister stressed that troika officials will return to Greece this week and that an agreement over fiscal measures for 2011 and 2012 has been reached over the phone. Venizelos again rejected all speculation about a larger haircut of Greek bonds and an orderly default of the country, while commenting on the sixth tranche of a loan facility to Greece he said its release will be on time and said that figures over the participation of the private sector in the Greek state bond swap program “were optimistic and encouraging”.
“The July 21st decisions are an 'institutional gospel' and we must strictly adhere to their implementation,” Venizelos said, adding that “if we succeed the country will be saved. If we lose the war the country will suffer a disaster similar to a defeat in real war except of human losses”.
The Greek minister said the country must make more efforts and the Greek Parliament must approve more austere measures. “A vicious cycle of deficits and recession cannot break if we move back and forth. Now that we have felt the consequences of recession we must make a big effort to achieve primary budget surpluses in 2012,” he said. He expressed his confidence that PASOK deputies will approve a draft bill introducing a special tax on property, while he rejected scenarios of sharing government with the main opposition political party New Democracy.
The Greek minister announced that all new fiscal measures were expected to be voted in Parliament next month. This measures will include a retroactive implementation of a new lower tax-exempt level of 5,000 euros (excluding pensioners, youth up to 30 years of age and families with more than two children). This measure will save 0.6 pct of GDP. He also announced changes in the taxation of property and said that ministers will be responsible for drafting lists of labour reserve in the wider public sector. Venizelos said a new payroll system in the public sector and public sector enterprises will be implemented from November 1, saving around 20 pct of payroll cost.
The Greek minister announced that privatisation revenues were expected to come in at 4.0 billion euros this year, down from earlier estimates of 5.0 billion euros.