By Denise
Roland
telegraph.co.uk,
26 Sep 2013
Greece is
determined to avoid another international bail-out even though it faces a gaping
hole in its public finances, the country's deputy prime minister has said.
Greece faces a funding shortfall of € 11 bn
(£ 9 bn) by 2016, according to the International Monetary Fund (IMF), but
Evangelos Venizelos, deputy prime minister, has claimed the recession-gripped
country can sidestep another bail-out by "reprofiling" its debt. He
also maintained that this measure would not amount to creditors shouldering
losses.
"We understand very, very well how
difficult it is for every government to accept debt relief," said Mr.
Venizelos, who in his previous role as finance minister oversaw Greece's second
bail-out, in an interview with Reuters.
"Our demand is not debt relief. It is
additional reprofiling without problem, without additional burden for our
institutional partners," he added. His comments come as officials from the
EU and IMF visit Greece for a regular inspection of the country's finances.
They are also holding talks about the release of the next €1bn tranche of
bail-out cash from the second rescue deal, and the possibility of a third
bail-out.
If Greece is given further bail-out cash,
the sums involved are set to be much lower than the previous two packages,
which run to € 210 bn. The government is reluctant to cut public spending
further, and this week faced the second round of civil servant strikes in a
fortnight. Public sector workers took to the streets on Tuesday to protest
troika-imposed measures of cutting 4,000 state jobs and moving 25,000 workers
to different posts.
"We are talking about the potential for
a lost generation here," Mr. Venizelos said, adding that Greece faced the
prospect of a social explosion if its citizens are forced to endure more fiscal
austerity was the biggest risk for the country.
"It is not possible to implement new
fiscal measures. It is not possible to impose new cuts on wages and
pensions," he said. EU figures are divided over the inevitability of a
third bail-out for Greece. Mario Draghi, president of the European Central
Bank, on Monday described Greece's debt levels "sustainable" and said
talk of another rescue deal was "premature".
He added that Greece could stage a return to
the bond markets by the end of the year, making a bail-out unnecessary. Greece
has been locked out of the bond market since 2010, but the yield for a ten year
loan has returned to pre-bail-out levels. It currently stand at around 9.5pc
after climbing as high as 30pc at the height of the Greek debt crisis.
Meanwhile, Wolfgang Schaeuble, German
finance minister, told voters "there will have to be another
programme" for Greece, in a surprising move that pit him against his
government colleagues, who had been playing down the prospect while campaigning
for re-election.
