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Venizelos Promises Greeks More Gradual Adjustment, No New Taxes

Evangelos Venizelos, Greece’s former finance minister, said the socialist Pasok party he now leads aims to make Greece an equal partner in the European Union and end the country’s reliance on international financial aid by the end of 2015.

“Our aim is to shape a clear and stable framework that will gradually reduce Greece’s dependence on financial aid,” Venizelos said in a speech in Athens today, shown live on state- run NET TV. “Our aim is for Greece to be a fiscally self- sustaining and equal member of Europe” and “to gradually exit the loan agreement, with dependency ending in three years.”

Following May 6 elections, a new government must in June spell out to the European Union and International Monetary Fund how it will find 11 billion euros ($14.6 billion) of budget cuts for 2013 and 2014. Venizelos said Pasok aims to extend these measures over a three-year period to the end of 2015 rather than over the next two years.

Pasok would make structural changes and cut spending, and wouldn’t introduce new taxes nor make widespread cuts to pensions and wages, Venizelos said. “No Greek man or woman should live with the fear of the June measures.”

With the last opinion polls, before a two-week ban on their publication, showing no party winning enough votes to govern on its own, Venizelos said Pasok would not enter a possible coalition just for the sake of being in government.

Liquidity Agreements

Venizelos said a prerequisite for growth in Greece is improved liquidity and that a Pasok government would get the country’s banks to sign liquidity agreements with the state to ensure money is channeled to businesses. “The heart of the problem of growth is liquidity and growth means having money in the market.”

A Pasok government would ensure a fair and stable tax system as the greatest benefits to an economy are reductions to income tax, social security contributions and indirect taxes, Venizelos said. Measures including the reduction of social charges by 5 percent, a gradual cut to excise and sales taxes, the removal of a crisis levy on wages as well as the replacement of a special property levy with the introduction of an all inclusive real-estate tax would cost no more than 1 percent of gross domestic product, he said.

To contact the reporters on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net Maria Petrakis in Athens at mpetrakis@bloomberg.net

To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net Stephen Foxwell at sfoxwell@bloomberg.net

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