Greece: 'worst is over' before IMF delivers verdict
Greece's crisis-hit economy is finally beginning to heal, according to the country's finance minister before a crucial report by the International Monetary Fund that is likely to be more positive than in the past.
Yannis Stournaras said "the worst is over" and the country had "reached the [bottom of the] trough".
Mr Stournaras's upbeat tone comes before the IMF's health check on the Greek economy, which is expected to indicate that the country is turning the corner. The IMF is expected to deliver its annual Article IV Consultation on the country on Monday, which will give its verdict on whether the economic outlook is improving after six years of deep recession.
The IMF has praised improvements to Greece's much-maligned tax collection procedures, according to reports in the Greek media at the weekend.
Mr Stournaras said attempts to fix the country's parlous public finances are starting to bear fruit, and could allow it to return to financial markets as early as next year.
Athens is on course to deliver a primary budget surplus - which does not take into account debt payments - a year ahead of schedule. He added the country had already pushed through two-thirds of the reform measures needed to address the huge holes in the nation's budget. Interest costs on Greece's massive debt have been sharply reduced by the debt restructuring the government has made.
In interviews with Greek newspapers at the weekend, Mr Stournaras said Greece could return to international debt markets by next May.
This would reduce the country's reliance on its latest bail-out from its troika of lenders, the IMF, the European Commission and the European Central Bank.
"Whether Greece is able to take the first step of independence from the troika will depend on all that has to happen by then," Mr Stournaras told Greece's To Vima newspaper. "In May 2014, the loan instalments will come to an end and the country has to be in a position where it can go on its own to the markets."
He told Germany's Frankfurter Allgemeine Zeitung that there were indications that the worst is over. "For instance, the central bank of Greece told me industrial production is stabilising. Production isn't falling any more and we appear to have reached the trough."
He said there was still a pressing need to address imbalances between richer northern countries and indebted southern states that the eurozone has created. "We need to find a way that countries which benefit from the effects of the eurozone crisis can share those profits with the other countries," Mr Stournaras said.
"We have to remember that in a system of fixed exchange rates, the result of deflation or austerity is always a recession in all countries."
On Sunday, the president of the European Commission defended German Chancellor Angela Merkel against criticism that she is to blame for harsh austerity measures implemented across Europe.
Jose Manuel Barroso said: "This crisis and the problems that go with it are not the result of German policies or the fault of the European Union. They are the result of excessive spending policies, of lack of competitiveness and irresponsible action by the financial markets."
Any Greek recovery is likely to be slow. Unemployment is at 27 per cent, while Greece has debts of more than 150 per cent of GDP. The European Commission has forecast shrinkage in its economy of 4.2 per cent this year.
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