Stournaras Says No More Austerity

After already guaranteeing Greece would begin an economic recovery by the end of the year, Finance Minister Yiannis Stournaras now has promised that despite disappointing tax revenue figures that there will be no more austerity measures put on beleaguered Greeks.
He couched it by saying that didn’t include those already agreed to by Prime Minister Antonis Samaras with international lenders who demanded pay cuts, tax hikes and slashed pensions in return. That has combined to eat up nearly half of Greek’s pay checks.
“This is the last time that our citizens will have to carry such a burden,” Stournaras told Parliament. “The Greek government will not take other measures that have to do with wage cuts, pension cuts and tax hikes. From now on, the program focuses on changes that bring about the modernization of the state.”
Greece is under pressure from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) to go after tax cheats who owe the country $70 billion, to speed the pace of lagging privatization and to get foreign investment to spur growth as austerity measures have wrung out almost all of many Greeks ability to pay more.
Stournaras tangled in a battle of words with major opposition party Coalition of the Radical Left (SYRIZA) leader Alexis Tsipras who accused the government of failing to capitalize on the IMF’s error in calculating the impact that the Greek austerity measures would have on the economy.
The newspaper Kathimerini repored that Stournaras retorted that Greece had raised the issue with the troika late last year and that he had asked Greece’s lenders this week to give a joint assessment. That prompted European Economic and Monetary Affairs Commissioner Olli Rehn to argue the Greek program had suffered from domestic political instability and implementation problems.
The IMF has acknowledged that it grossly underestimated the effect of austerity on Greece, with so much spending power taken away that it led to the closing of more than 68,000 businesses and drove down expected tax revenues despite big hikes in assessments.
“Of course I believe that the multiplier issue is important and of course I believe that the mistake is not just ours,” Stournaras said in response to Tsipras’s questions. “Clearly, Mr. Rehn is mistaken if he believes that the whole recession was a result of just Greece’s mistakes. However, I cannot follow the leap you make from the IMF using an incorrect parameter to having to cancel the whole program and abandon the memorandum.”
Samaras held a rare cabinet meeting on Feb. 15 to stress the importance of pushing through structural reforms and improving the absorption of EU structural funds. Former Hania Mayor Kyriakos Virvidakis was appointed deputy development minister to oversee the use of these funds.
Samaras indicated he will begin holding one-on-one meetings with his ministers next week. He will also meet coalition partners Evangelos Venizelos and Fotis Kouvelis on Feb. 18.