D
uring the first six months of the coalition
government’s life, Greece managed to
update and put back on track, in cooper-
ation with its international partners, the second
Economic Adjustment Programme, restore the
vital funding from the Support Mechanism (by
also increasing the funds of the scheduled dis-
bursements) and enhance the sustainability of
public debt. Particularly, the new government
managed to create the prerequisites for the
design and implementation of a strategic plan for
exiting the current crisis. More importantly,
Greece has restored its reputation as a credible
counterpart in the eyes of our international part-
ners. The cornerstone of our plan is pairing fiscal
adjustment with economic growth, in order to
enable our economy escape from the vicious cir-
cle of deficits and recession.
On one hand, we are decisively tackling public
spending and fiscal policy rationalization through
initiatives aimed at decreasing the fiscal and, in
particular, the structural deficit. To that end, the
Ministry of Finance has already implemented spe-
cific institutional and structural measures in order
to create a solid framework of fiscal rules and pro-
cedures that safeguard the achievement of the
Medium Term Fiscal Strategy’s targets. This effort
has already yielded results. At the end of 2012,
we over-achieved the budget’s targets in terms of
the budget balance and the primary budget bal-
ance. It should be noted, though, that the deep
recession in the domestic economy creates head-
winds and reduces the effectiveness of the fiscal
consolidation effort.
On the other hand, we are pursuing the imple-
mentation of specific measures and policies that
focus on reversing the recession and increasing
the liquidity of the economy, addressing the
deficit’s cyclical dimension. In this framework, the
two major priorities of the government are (a) to
continue enriching the pursued economic policy
with measures and actions aimed at the, what we
Trade with Greece
14
Greece has left behind a long period
of enormous anxiety and uncertainty.
Since the June 2012 elections, the
country has entered a new period of
stability; a period that brought back
the confidence about Greece’s future
in the euro area.
Greece:
On the road to
recovery
By Christos Staikouras,
Alternate Minister of Finance
