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Greece's new cabinet sworn in as IMF cautions on debt

June 10, 2014

Athens (Alliance News) - Greece's new government was sworn in Tuesday, just as the International Monetary Fund cautioned that the country had a long way to go to pull itself out of its financial crisis.

In a report released Tuesday on its latest review of the country's progress under its 240-billion euro (325 billion dollar) bailout, the IMF said that while Greece had made "significant progress" in reforming its economy, it warned that its public debt remained "very high." It said that it is essential the EU help Greece to make it sustainable.

"With debt projected to exceed the targeted path, ... it is essential that Greece's European partners reafform their commitments to the agreed debt strategy by standing ready to provide the additional relief needed to keep debt on this path," the IMF said.

The IMF also urged the government to increase efforts to combat tax evasion, liberalize markets and speed up public administration reform. It also advised the government to help banks deal with a "mountain of bad loans."

The report comes one day after Prime Minister Antonis Samaras carried out a broad cabinet reshuffle aimed at showing Greeks that the government is abiding by their demands for change.

"It is a new era for the country. ... Greece step by step is coming out of the crisis," Samaras said at the start of the first cabinet meeting.

"The goal of the government remains the same ... to get out of the recession, encourage development and to tackle unemployment," he added.

Samaras replaced Finance Minister Yannis Stournaras with economist Gikas Hardouvelis, signaling the intention to remain on the difficult austerity reform path demanded by Greece's international lenders that are keeping the country afloat.

But while Hardouvelis, a chief economist at Eurobank, is expected to remain on the same reform path as his predecessor, he is also likely to push for growth by cutting taxes as the country struggles with an unemployment rate of nearly 27%.

"Greece is suffering," Hardouvelis told Greek television ANT1. "Every household has at least one unemployed person or someone who is working and is not being paid."

"Greece must find its way," he said. "There is a lot to be done. We have a marathon before us."

Hardouvelis served as director of the economics office under two previous prime ministers, Costas Simitis in 2000-2004 and Lucas Papademos in 2011.

Samaras carried out his reshuffle after the left-wing SYRIZA party beat the governing New Democracy party in local elections and voting for the European Parliament last month.

The results are evidence of the anger felt by Greeks over austerity reforms demanded under the country's international bailout, namely repeated tax hikes as well as pension and salary cuts.

Other cabinet changes include the ministers of public order, interior, culture, education and health.

Evangelos Venizelos, who is a partner in Samaras' coalition government and the leader of the Socialist party, kept his post as deputy prime minister as well as foreign minister.

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Source: Alliance News

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