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Monday 10 October 2011

Venizelos: We must cut spending (Start with your selves ...e)



 FinMin raises eyebrows by comparing current living standards with those of prosperous 2004
The extravagant opening ceremony of the Athens Olympics in August 2004 served to illustrate the prosperous state of the country’s finances at the time
By George Georgakopoulos
The government and representatives of its creditors almost completed their negotiations on Monday, with only some details left to be fine-tuned on Tuesday, according to Finance Minister Evangelos Venizelos, who, however, raised some Greek eyebrows by suggesting that living standards would return to those of 2004 next year.
“There are some technical issues left to discuss for Tuesday,” said Venizelos in Parliament after his afternoon meeting with the troika officials from the European Union and the International Monetary Fund.

“We have also advanced negotiations about the years 2013 and 2014, and it is obvious that in 2012 we need to take a more radical approach to public expenditure in order to find the necessary resources, not through new revenue measures but through cutting spending,” the minister stated.
According to the troika, the Greek state should be in a position to secure additional annual revenues of at least 6 billion euros in 2013 and 2014, so as to contain the Greek deficit below 3 percent of gross domestic product.
Venizelos added that unless a plan with the essential rationalism is applied, the cost of serving the public debt will soar from 12 billion euros in 2009 to over 18 billion. In this context, the government is expecting “a PSI [private sector involvement] plus scheme, a total package that will be much better than the one originally planned.”
Venizelos then went on to warn that “unfortunately the incomes, the living standards will revert to 2004 levels, as total recession will have reached -15 percent by the end of 2012.”
The statement left deputies and journalists aghast, given that the comparison of the crisis-riven 2011 or 2012 with the living standards of the year that Athens staged the Olympic Games at a high financial cost seemed hardly appropriate at this stage.

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