Greek Prime Minister Says Positive Economic Data Points to Austerity Easing
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Version 0 of 1. ATHENS — Prime Minister Antonis Samaras of Greece seized on new economic data on Saturday that indicated the country was on track to economic recovery and promised relief to Greeks weary of years of punishing austerity. “Greece is turning the page,” Mr. Samaras told politicians and entrepreneurs at an annual international trade fair in the northern port of Thessaloniki, traditionally used by Greek prime ministers to outline their government’s economic policy for the coming year. “There will be no more austerity measures,” he said. Citing figures released on Friday by the national statistics agency, Mr. Samaras said the Greek economy shrank 3.8 percent in the second quarter, significantly less than an estimate of 4.6 percent. It was the smallest contraction since 2010, when Greece signed its first multibillion-euro loan deal with its so-called troika of creditors — the European Commission, European Central Bank and International Monetary Fund. The improvement is largely the result of an unexpectedly strong rebound in the country’s crucial tourism sector, with a record 18 million foreign visitors expected this year, he said. Equally encouraging are early indications that the country will achieve this year a primary surplus — a budget surplus not counting debt financing, Mr. Samaras said. He said this would be the “first decisive step toward exiting the policy of memorandums,” referring to Greece’s two loan agreements since 2010, which are worth a total of 240 billion euros ($315 billion) and have been meted out in installments in exchange for a series of austerity measures. Mr. Samaras said achieving the surplus would open the way for two things, in line with an agreement with creditors — some form of debt relief for Greece, but also the chance to help citizens who have been hardest hit by austerity. It remains unclear how large the surplus will be; Mr. Samaras put it at 1.1 billion euros for the first seven months of the year. Mr. Samaras said 70 percent of the surplus would go toward “lightening the injustices” suffered by Greeks on low pensions and by members of the police, fire service and coast guard whose salaries have been slashed as part of public sector cutbacks. Greece remains wracked by political and economic instability and may even need additional bailout money. The I.M.F. warned in a report at the end of July that a persistent recession, now in its sixth year, and the government’s failure to accelerate overhauls might create an 11 billion-euro hole in Greece’s finances over the next two years. The monetary fund said Greece’s economy could return to growth as early as next year. But that forecast comes with a question mark, given that output has fallen 25 percent since its peak in 2007, while unemployment has surged to 27 percent — the highest in the euro zone — and youth joblessness has exceeded 60 percent. Mindful that representatives of the country’s troika of foreign lenders are expected back in Athens later this month for a new audit, Mr. Samaras was vague on details about potential handouts, including a potential subsidy for heating oil, which saw an increase in taxation last year. He also promoted the benefits of an economic reform program that was bolstered by a write-down of privately held Greek debt last year and the suspension of interest payments on foreign loans, which together helped cut Greece’s debt by 145 billion euros. It now stands at 321 billion euros. “We stopped the debt from ballooning,” he said, claiming that Greece could return to precrisis levels of prosperity by 2020 by exploiting the potential of its tourism and energy industries and by pushing a program of state privatizations. “Five or six years of difficulties cannot wipe out 3,000 years of glorious history.” The premier lashed out at the main leftist opposition, Syriza, which opposes the terms of Greece’s foreign loan agreements, saying it “does not want to govern.” He claimed that the leftists were as extreme as “the neo-Nazis” of the ultraright, anti-immigrant party Golden Dawn, which has soared to third place in opinion polls, after Syriza and the premier’s conservative New Democracy, which leads the coalition government. In a statement, Syriza accused the prime minister of “suffering from delirium,” saying, “Mr. Samaras sees unemployment slowing down even as 1.5 million of our fellow citizens don’t have work.” Alexis Tsipras, the leader of Syriza, joined anti-austerity protests in Thessaloniki on Saturday evening, which were expected to draw thousands of disenchanted workers. About 4,000 police officers were being deployed to prevent the violence that has marred previous rallies organized by trade unions. Unionists are planning to scale up their opposition to austerity in the coming weeks ahead of the scheduled return to Athens of troika inspectors after German federal elections on Sept. 22. The problem of Greek debt, and how to handle it, has featured prominently in campaigns for the German elections, whose outcome is expected to set the tone for tough negotiations between the Greek government and the troika. Chancellor Angela Merkel of Germany has insisted there will be no second debt haircut for Greece but has suggested a third loan program, much smaller than the first two, might be extended to Athens to cover the anticipated 11 billion euros funding gap. The gap is expected to be discussed in talks between Greek government and troika officials in Athens. Negotiations will also focus on a raft of tough proposed reforms that are sure to test the stability of Mr. Samaras’s fragile coalition. They include a lagging program aimed at selling off state assets, lax tax collection efforts, the progress of a system of forced transfers and layoffs in the Civil Service, the possible closure of state-owned defense companies that are running losses and a likely end to a moratorium on home foreclosures. |