Stournaras predicts recovery from next year and more debt-relief requests

Finance minister adds that he expects unemployment to fall from late 2014

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In an interview broadcast on Thursday morning on state-run Net television, Yannis Stournaras said that achieving a primary surplus would allow the country to request more debt relief from the country's creditors

Finance Minister Yannis Stournaras Finance Minister Yannis Stournaras The economy should start recovering from next year and unemployment should edge lower from the end of 2014, the finance minister has told the state broadcaster.

Speaking on Net, Yannis Stournaras said the government's aim was to achieve a primary surplus - a surplus without taking into account interest payments on outstanding debt - by the end of this year. He said this would allow the country to ask its international creditors for some further debt relief.

"If we achieve a substantial positive surplus, then ... we can seek a further reduction in debt," he said. "That's what I see as the main goal today ... We owe it to the future generations."

The official target is for a balance by the end of this year.

Last year, the state saw its privately held debt cut by more than half in a bond swap. The government has said that according to an agreement made with its creditors late last year, it could seek a reduction of the debt held by the official sector, such as governments, once it has achieved a primary surplus.

Stournaras expressed the hope that the country would be able to return to markets at the end of next year. The yield on the country's benchmark 10-year bond is currently just below 10%, far too high to contemplate a return to markets now. Stournaras hoped that rate could fall to below 6 percent next year.

"I see recovery from 2014 onwards," Stournaras said. "The climate has already turned. At the moment the international factor sees that Greece is being saved, that it remains in the euro."

The minister said unemployment would take longer to fall - it is a lagging economic indicator - but that improvements should be visible by the end of next year.

"The reduction of unemployment doesn't immediately follow recovery," he said.

Stournaras also reiterated a promise to citizens that they would not have to endure any new measures - as long as the ones already promised are implemented.

"As long as we keep to the measures we have promised, there is no need for new measures," Stournaras said. "There will be a need if for some reason we don't take one or more of the measures we have promised to take."


While he admitted that the results of the government's attempts to clamp down on tax evasion are not satisfactory, Stournaras said that efforts are being made to reverse the situation.

The task was made all that more difficult given that the country has a higher proportion of self-employed than other EU countries. But he also said that the existing penalties for tax dodging are inadequate.

Nevertheless, he said that 650 people have been jailed in recent months for tax-related issues and assets worth €2bn have been seized, of which €400m has gone into the state's coffers. 

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