• TIN TỨC
• VIDEO

There is no need for Greece to take additional austerity measures, but the euro zone should show concrete support to prevent speculators from exploiting the country's debt crisis, Greek economy minister said on Friday.

"I do not think any additional measures should be taken for the reason that first of all, the program we submitted should be implemented," Louka Katseli said in an interview with Xinhua.

 The Greek government presented an austerity program to the European Commission one month ago, promising to cut its deficit, which reached a staggering 12.7 percent of gross domestic product (GDP) in 2009, by 4 percentage points this year, and bring it below the EU's ceiling of 3 percent of the GDP by 2012.

Although the program was endorsed by the European Union (EU)'s executive arm early this month, it failed to soothe market speculation about possible debt default by the Greek government. Fear of a spill-over effect in the euro zone dragged down stock prices and undermined the euro.

So, Greece is now facing huge pressure from its EU partners to adopt new deficit-trimming measures. EU finance ministers decided earlier this week that Athens should be ready for additional measures by March 16 if its current efforts prove insufficient.

 Katseli said she was convinced that the current program would be sufficient and any additional measures may be counterproductive.

"I have no doubt that in 2010 we will be able to reach the goal of bringing down the deficit by 4 to 5 percentage points," she said, "We need to be extremely careful to implement measures which are even more restrictive at a time when the economy is in a recession, because the more restrictive measures would plunge the economy even further to recession, which would not be effective in tax collection."

The Greek government is also on alert against social unrest as more strikes on the streets are foreseen to protest the austerity measures of reducing public spending and raising tax.

Many Greek gas stations were left with no fuel on Friday as a strike of customs workers stopped imports. Trade unions across Greece are also planning to stage a general strike next Wednesday.

 Katseli said Greece is facing a very difficult situation not only because of past policy mistakes by its governments, but also because of speculative attacks on both Greek bonds and the euro, which significantly pushed up the cost for the Greek government to borrow from international markets.

 "So our challenge is two-pronged," she said, adding that a solution to the crisis would rest not only on the efforts of the Greek government to put its house in order, but also on the EU's intervention.

 "We are asking for not only political solidarity but also concrete moves on the part of the EU to give breathing space necessary for the (Greek) program to be implemented," she noted.

 Katseli warned that requesting Greece to do more at this point is in effect destroying the program already announced and may invite further speculative attacks.

 "The issue is not for the country to take more measures since we have not had a chance even to implement the program which we had decided, but for the euro zone countries to see how to address the speculative issue," she said.

 However, the EU wants to force Athens to take serious measures first before giving any support.

 "Greece has very serious problems that can only be tackled from Greece," EU Economic and Monetary Affairs Commissioner Joaquin Almunia told a conference in London on Friday. "If this responsibility is assumed by the Greek authorities, as a member of the EU, as a member of the euro area, Greece deserves support and deserves solidarity."

Katseli said she felt disappointed with the EU's response up to now. A pledge by euro zone leaders to "take determined and coordinated action to safeguard financial stability" at an informal summit last week has not been translated into concrete measures.

"I think this is a test for the euro zone and for European institutions. This is the test case today for Greece. Tomorrow it might be another country," she warned.

 "The euro zone countries should really strengthen the institutional mechanisms that they have, so we will not let individual member of the euro zone be victim of speculative attacks either on their bonds or on the euro," she added.

 Concerning possible support from the euro zone, the minister said the European Central Bank (ECB) should extend its special collateral rules by one or two years.

 The ECB currently accepts bonds rated below A as collateral after relaxing its rules in response to the financial crisis, but the special mechanism is due to end this year.

 After Greece sharply revised up its deficit figure in October, all three major credit rating agencies downgraded the bonds of the Greek government below A, which means Greek banks can no longer use Greek bonds as collateral to borrow money from the ECB next year and will face a severe liquidity problem.

The extension of the special rules will allow Greece "to borrow from the ECB at low rates so then we can finance the restructuring of our economy and also sustain economic activity during this time of crisis," Katseli said.

 However, ECB president Jean-Claude Trichet has made it clear that there will be no "special treatment" for Greece.

 VietNamNet/Xinhuanet