Stournaras: No to auctions because the banks will collapse

Yannis Stournaras indirectly addressed Troika on the issue of auctioning with a statement from Brussels Thursday evening after the ending of the Eurogroup meeting.

In his first public address on this issue by the Greek FinMin clarified that it is impossible to remove all protection measures for the first residence from January 1st,  since there is no mechanism to replace auctions. As Stournaras explained, if auctions are deregulated banks will face a major risk as real estate prices will collapse with the market flooding with houses.

The measures proposed by Greece to Troika stand at 1.3 billion euros

In the press conference after the Eurogroup meeting Stournaras referred to the distance between the Greek government and the Troika on the budgetary gap explaining that Greece proposes measures at 0.7% of GDP, or 1.3 billion euros, proposals that will be considered Sunday when Greece will resume discussions with Troika in Athens.

He clarified, however, that the measures will not be of austerity but financial nature, and that proposals for savings of 0.7% of GDP are based on the following guidelines:

 

-       filling the revenue hole from the collection of social security contributions, as he believes there is gradual improvement in fundraising

-       cost reduction in utilities and public entities that have surpassed the expenditure limit

-       mergers in Health and Education

-       strict enforcement with penalties for those who violate the single payroll

The issue now for Stournaras is for Troika to be convinced of the correctness of these measures. He also believes that the Greek government its an ace up her sleeve, large untapped land areas, which can serve as engines of growth and income.

On closing the defence industries he reiterated the government's position to restructure the company without reducing its exports. As he told European ministers, "we are in a different part of the world and we must maintain a significant military and defense industry," but added that it is not possible to do the same with ELVO.

He estimated that the primary surplus will reach 1% of GDP since as he said the weak point that was the state revenues, has already been covered and the Greek state is 300 million euros over the original estimate.

Speaking, lastly about the recession he estimated it will be less than expected, and instead of the original forecast of 4% of GDP is now below 3%.