THE GREEK minister for finance has dismissed reports about a breach in the nation’s relations with its international lenders and said his country was accelerating structural reforms to exit its debt crisis.
“We have the voted measures which should be implemented and several structural issues for which our country should show better results, in a faster and more resolute way. And this is what we are doing,” Evangelos Venizelos said yesterday.
Mr Venizelos said Greece would stick to its promises to its lenders not because this was imposed from abroad but “for the sake of our children”.
On Friday, Greece and an EU-IMF inspection team interrupted discussions on a new aid tranche after disagreeing over why Athens has fallen behind schedule in cutting its budget deficit. Discussions are due to resume on September 14th.
Greek media reported over the weekend that the main reason for the disagreement was that Mr Venizelos, after consulting the prime minister, George Papandreou, refused to take additional budget cuts that would deepen recession in the austerity-hit country.
Mr Venizelos criticised the reports, saying they were scenarios “aiming at cultivating uncertainty and scaremongering”.
Meanwhile, the former Dutch minister for finance Gerrit Zalm has said Europe would fall into a recession worse than the one seen in the 1930s if the euro zone fell apart.
Asked on Dutch current affairs TV programme Buitenhof what would would happen if the euro zone broke up, Mr Zalm said: “We will have a recession which makes the 1930s look like nothing.”
He added: “The whole of Europe will crumble. You will get Switzerland effects. Switzerland has gotten a very strong currency and are being pushed out competitively because of the strong franc.
“For the Netherlands it would mean that if the European economy plunges, we would follow. Three-quarters of our exports go to Europe.”
Mr Zalm, who was Dutch finance minister until 2007, earned a fiscal hawkish reputation in Europe as one of the proponents of budget rules.
He was the longest-serving Dutch finance ministers, having had the job for 12 years, and said he disagreed with calls from former European commissioner and Dutch politician Frits Bolkestein to put Greece out of the euro zone. “I don’t think that is the solution. The next remark will be that Italy should leave the euro zone, that Ireland should leave, that Portugal should leave.
“If that continues long enough you remain with only the Netherlands and Germany. I don’t think that is a good development,” Mr Zalm said.
European aid to Greece should be given on the condition that Greece left the euro zone and returned to the drachma currency because keeping the euro would be worse, Mr Bolkestein told Dutch current affairs TV programme Nieuwsuur.
By returning to the drachma, Greece could devalue its currency and stimulate exports. To be able to pay its debt with a weaker currency, Greece would have to restructure it, said Mr Bolkestein, who was internal markets commissioner until 2004. – (Reuters)
