Greece Minister: ‘Whatever It Takes’ to Solve Crisis

By Meera Louis and Alaa Shahine - Sep 26, 2011 1:56 AM GMT+0700
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Greek Finance Minister Evangelos Venizelos. Photographer: Joshua Roberts/Bloomberg

Greek Finance Minister Evangelos Venizelos said his country will do “whatever it takes” to meet its budget goals and cautioned against making it a “scapegoat” for global economic woes.

Venizelos, who is also Greece’s deputy prime minister, pledged that the country will always remain a member of the euro zone, in an effort to dismiss investors’ concern that its debt crisis may cause it to break away from the currency union.

“Greece wants to make it and will make it,” he said in a speech today in Washington after attending the annual meetings of the International Monetary Fund and the World Bank. “We are ready to take the necessary initiatives at any political cost” to improve the economy, he said.

Greece has yet to secure a second international bailout amid questions about whether it can satisfy the terms for aid. Economists at Citigroup Inc. say they expect the country to begin restructuring its debt as soon as December. Analysts at JPMorgan Chase & Co. (JPM) predict the euro area will start contracting in the fourth quarter and that the European Central Bank will cut interest rates next month.

“It’s Greece’s final and irrevocable decision to do whatever it takes to fulfill its obligations towards its partners, towards the euro area, towards the IMF,” he said.

No ‘Domino Effect’

The size of Greece’s economy and its debt make it unlikely to be at the “heart” of Europe’s problems and incapable of “causing a domino effect of pan-European dimensions,” Venizelos said.

“Greece is not the euro area’s central problem, nor can it be the catalyst” for a financial crisis, he said, noting that Greece’s debt accounts for 3 percent of the euro area’s public debt.

Venizelos said that the biggest problem for his country is the public sector.

“The main problem for my country is the public sector and the capability of the public administration to offer the necessary services to our people, to our society with a cheaper, more clever way,” Venizelos said.

Greece’s top priority is “to organize a smaller, clever and cheaper state,” he said. “This is our basic need, not because this is an external obligation but because this is an internal, existential need.”

To contact the reporters on this story: Meera Louis in Washington at mlouis1@bloomberg.net; Alaa Shahine in Washington at asalha@bloomberg.net

To contact the editor responsible for this story: Kevin Costelloe at kcostelloe@bloomberg.net