Stathakis: Greece rescued

  • 22 June 2015
  • From the section Business

In an exclusive interview, Greece's Economy Minister Giorgos Stathakis has told me that he believes Greece's new proposals to balance the government's books have broken the deadlock with its creditors.

He said he expects eurozone government heads to issue a communique later today that will say there is now a basis for a formal agreement with Athens to complete the current bailout programme and release €7.2bn of vital funds.

Mr Stathakis conceded that technical work would need to be done in the coming days to formalise the agreement. But he was hopeful that Greece would be able to make its €1.5bn payment to the IMF on its due date of June 30 - and therefore avoid a devastating default.

He detailed Greece's new money-raising proposals. These include:

1) A new tax on businesses

2) A new tax on the wealthy

3) Some increases in the VAT rate on selected items.

But he said that his Syriza government, led by Alexis Tsipras, had avoided crossing its red lines.

So, he said, there would be no further reductions in pensions or public-sector wages. And there would be no increase in VAT on electricity.

He also said that the government had agreed with the IMF and eurozone governments that the targeted budget surplus would be 1% of GDP or national income this year, 2% next year and 3% the year after.

There will be no agreement with creditors to cut Greece's massive burden of debt, despite Syriza's earlier insistence on this. But Mr Stathakis told me the government heads' communique would say that debt relief will be on the agenda for negotiation in coming months.

He anticipates some criticism for the agreement from the left of his party. But believes his government can ride this out.

Crucially he believes Mr Tsipras has done enough to prevent the European Central Bank ending its emergency support for the Greek banking system.

Mr Stathakis also said that the government will be able to re-introduce collective bargaining by trade unions, which is of vital importance to his party.