Crisis-hit Greece will emerge from recession at the end of 2011 after "two difficult years" when measures to cut spending and boost growth start paying off, the country's Development Minister said yesterday.
"We have a difficult two years ahead of us, but I believe that the measures will pay off and the exit from recession will be visible at the end of 2011," Development Minister Louka Katseli told Naftemboriki daily.
"What is important now is to work hard so that in a few years we will stop talking about a Greek problem, and talk about a Greek miracle," she said. The Greek economy is expected to contract by four per cent this year, complicating the government's titanic efforts to slash the budget deficit from 13.6 per cent of output to below the threeper cent threshold mandated by the European Union by 2014.
According to the Finance Ministry, the economy is not likely to return to growth before 2012.
Greece has narrowly avoided default by drawing on a €110 billion rescue loan set up on its behalf by the European Union and the International Monetary Fund, the first ever involving a eurozone member.
A first instalment of €20 billion was released in the last two weeks to enable Athens to redeem a €9 billion bond on May 19. But the bailout came at the cost of wage and pension cuts, tax rises and hiring freezes in Greece's bloated bureaucracy, and the release of further loan instalments will depend on the application of the austerity programme.
The measures have sparked four general strikes since February including two this month.
Ms Katseli said yesterday that new legislation to facilitate investment would be ready by the end of 2010, while a law to boost domestic development would be approved in the early summer.
But the country's influential unions have threatened to mobilise again when a controversial pension reform goes to a Parliament vote later this month.
The government earlier this month presented a radical overhaul which would see an average reduction in pensions of seven per cent by 2030 while the upper category of pensions would be cut by up to 14 per cent.
The reform would also raise the average effective retirement age to 63.5 from 61.4, curbing Greece's widespread early retirement schemes.
The European Commission is now calling on Greece to implement the new system three years earlier than originally envisaged, the Greek Labour Minister said this weekend.