ATHENS (MNI) – Greece will not need a new loan from the European
Union and can return to the capital markets if it implements the
necessary structural reforms, Olli Rehn, the European Commissioner for
Economic and Monetary Affairs, said today.
He noted that, “Greece will not meet the deficit target this year,”
mainly because of the upward revisions to deficit figures announced by
Eurostat last month. However, he said that Greece will be back on the
right fiscal path in 2011, when it must reduce the deficit to 7.5% of
GDP.
Speaking at a press conference here in Athens after meeting with
Prime Minister George Papandreou and Bank of Greece Governor George
Provopoulos, Rehn underlined the importance of sticking to the necessary
changes, which he said should aim at restructuring the health sector,
further cutting public spending and reforming the indebted public
utility companies (DEKO). He also said that the government must speed up
the privatization program and the opening of closed professions.
Referring to Ireland, Rehn welcomed the Irish parliament’s vote to
approve the first part of the Irish budget, which is a precondition for
the E85 billion aid package that Dublin struck two weeks ago with its EU
partners and the International Monetary Fund. But Rehn refrained from
commenting on Thursday’s decision by Fitch to downgrade Ireland’s
sovereign debt.
Responding to a question on whether the austerity measures
undertaken by the peripheral Eurozone countries could lead to a split of
Europe into two parts, the commissioner rejected such a scenario, saying
it was “unrealistic.” He said that the EU is moving quickly to establish
a new institutional mechanism to ensure that such a scenario will not
materialize.
–Angelika Papamitiadou, a_papamiltiadou@hotmail.com; +306-937-100071
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