Re­form plan among con­di­tions

‘New re­la­tion­ship’ be­tween Greece and its peers to in­clude terms on im­prov­ing state and business sec­tors

Kathimerini English - - Focus - BY SOTIRIS NIKAS

Fi­nance Min­is­ter Gikas Har­dou­velis yes­ter­day out­lined the gov­ern­ment’s new re­form model, which will form part of the “new re­la­tion­ship” be­tween Greece and its eu­ro­zone peers in­volv­ing the sup­ply of emer­gency credit if Athens re­quires it.

In his ad­dress to the Cap­i­tal + Vi­sion con­fer­ence in Athens, Har­dou­velis said that the main pil­lars of the new re­form model in­clude im­prov­ing both the business en­vi­ron­ment and the the ef­fi­ciency of the pub­lic sec­tor, strength­en­ing the in­sti­tu­tional roles of jus­tice and the ed­u­ca­tional sys­tem, and the ap­pli­ca­tion of a pro­gram of grad­ual tax ex­emp­tions that will be in line with the fis­cal con­ver­gence tar­gets.

This new re­la­tion­ship, which will have the Greek re­form model as one of its con­di­tions, “will be de­ter- mined in de­tail in the com­ing pe­riod,” said Har­dou­velis, re­fer­ring to the months up to the start of 2015.

“We are try­ing to suc­cess­fully com­plete the cur­rent and fi­nal as­sess­ment of the sec­ond Fis­cal Adjustment Pro­gram and pre­pare for the new re­la­tion­ship with our part­ners from early 2015, as well as for the agree­ment for the light­en­ing of Greece’s debt,” said the min­is­ter.

Be­sides the re­form model, the new re­la­tion­ship will hinge on two more el­e­ments, ac­cord­ing to Har­dou­velis. The first con­cerns the ca­pac­ity of the coun­try’s fund­ing from the money mar­kets; after all the gov­ern­ment’s main con­cern is to re­fi­nance Greece’s obli­ga­tions for 2015 from the mar­kets. The sec­ond el­e­ment con­cerns the ex­is­tence of a cap­i­tal re­serve that will op­er­ate as a mech­a­nism to strengthen the con­fi­dence of the mar­kets in Greece. This will likely be cre­ated us­ing the un­used re­serves of the HFSF bank bailout fund, amount­ing to some 11.4 bil­lion euros, now that the banks’ stress tests have ended with pos­i­tive re­sults.

“Re­gard­ing the cap­i­tal re­serve, we al­ready know that it could in­clude – with the agree­ment of our part­ners – the funds set aside for the Hel­lenic Fi­nan­cial Sta­bil­ity Fund... as they will not be used after all,” Har­dou­velis said.

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