Greece Faces Tough Times Ahead Says Finance Minister

ATHENS, May 9 (Xinhua) -- Greece faces more tough times ahead, but will manage to exit the debt crisis, Greek Finance Minister George Papaconstantinou said on Monday, amid Greek media reports that EU-IMF auditors give the government negative marks over progress in the implementation of the plan to exit the crisis.



"Our country went through difficult times, faces tough times and will face more in the near future, because it relied on a false development model. We fooled ourselves, but we will exit the crisis," said Papaconstantinou, addressing a forum held by Transparency International Greece over corruption and tax evasion.



Acknowledging cases of corruption among tax officials due to the complexity and bureaucracy of the tax system, he pledged more measures to address the issue, talking about "a crime which contributed to the current crisis".



Debt-ridden Greece narrowly escaped default last spring, securing a multi-billion euro aid package from the European Union and the International Monetary Fund in exchange of harsh austerity and reform policies to exit the crisis by 2014. But after a good start, lags on some targets, fueling scenarios of an eventual restructure of the Greek debt or other options.



The new progress report over the implementation of the Stability and Growth program written by the technical team of EU- IMF auditors who reviewed the latest data over the past week is negative, reported Greek media on Monday.



According to the reports, EU-IMF officials who will meet with Greek officials Tuesday to determine whether the country will receive the fifth tranche of loan funding, were informed of delays in the fiscal adjustment efforts, privatization program and labor market and tax system reform.



Furthermore, the technical experts deemed "unrealistic" some targets in the midterm program for 2012- 2015 to be tabled before a parliamentary vote next week, suggesting more measures to raise funds this year.



According to media reports, they warned that with the current progress Greece will not manage to slash the budget deficit to 7.4 percent of GDP as scheduled, but will reach a 9.5 percent from 10. 4 percent in 2010. The initial aim was to slash the deficit from 15.4 percent of GDP in 2009 to less than three percent in 2013.



Local analysts note that the current economic policy mix is being met with increasing doubts, even by cabinet ministers. Health Minister Andreas Loverdos expressed criticism over some " unclear points" Monday, fueling again scenarios of snap polls, which were immediately rejected by government spokesman George Petalotis.