Minister: Greece must stick to reforms

ATHENS: Greece must resist internal political pressure to slow economic reforms in a year that will dictate whether it avoids bankruptcy, Finance Minister Yannis Stournaras told Reuters in an interview.

With European Union (EU) partners starting to praise Greek efforts to exit its worst crisis in decades and some economic indicators showing fledgling signs of recovery, demands are increasing on the government to give up crippling austerity and reforms.

“What scares me is the big pressure from society, media and parliamentary deputies from all parties to ease the programme. We must resist ... it’s too early to declare victory,” he said from his office on Syntagma square overlooking parliament.

Stournaras, an economist recruited by Prime Minister Antonis Samaras’s conservative-led coalition after it won elections in June, said there were signs Greece was starting to exit the three-year debt crisis that shook the eurozone.

Money is returning to Greek banks, bond prices are rising and the 2013 primary budget will do better than the troika of international lenders predicted for the year, registering a 0.4% surplus, despite a crippling recession.

“The primary deficit is what we are judged on. The troika expects it at zero but we believe we will do slightly better,” he said. “This means that there is a good chance our partners may further reduce our debt.”

The International Monetary Fund (IMF) agreed on Wednesday to pay the next aid tranche under the country’s 240-billion-euro international bailout and said Athens was moving in the right direction. But IMF chief Christine Lagarde urged it to do more to boost productivity and lower prices.

Greece’s euro area partners agreed last year to extend the maturities and reduce the interest on the nation’s bailout funds to help cut its debt mountain to a more sustainable level of 124% of GDP in 2020, from an estimated 173% this year. — Reuters