The OECD Secretary-General Angel Gurria who was in Athens for a series of meetings yesterday, including the Prime Minister and the Ministers of Finances, has stressed the need for Greece to reduce its debt.
According to the OECD, Greek debt will be unsustainable in 2002 when it reaches 160% of GDP, rather than the 123% rate proposed by the EU and IMF. Mr. Gurria explained that his “realistic” approach disregarded the “optimistic” assumptions employed by the IMF and EU in their estimations, such as a 4.5% GDP growth rate.
Minister of Finances Stournaras objected to Mr. Gurria’s “realistic” estimations on the debt and referred to the divs of the optimistic IMF, EU and ECB estimations. Mr. Stournaras also disputed Mr. Gurria’s prediction of a seventh year of recession, when troika estimates suggest a 0.6% growth rate in 2014.
Mr. Gurria commented that the degree of reforms in so many sectors in Greece was unprecedented for an OECD member state. The head of the OECD appears to have urged Mr. Stournaras of pressuring his European counterparts for an immediate and complete solution to Greece’s debt problem, as soon as the primary surplus is secured, without ruling out the possibility of a new debt haircut.
Mr. Gurria praised the Minister of Growth Kostis Hatzidakis for improving the necessary conditions that will allow entrepreneurship to flourish in the Greek markets. The implementation of 66 of a total of 329 OECD proposals could result in a 5.2 billion euro annual benefit.
