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Greece Rules Out Need for Third Bailout

Greece's interim Finance Minister Filippos Sachindis

ATHENS – With $325 billion coming in two bailouts from international lenders, Greece will not need a third bailout despite its still sliding economy, interim Finance Minister Filippos Sachinidis said on April 4, nor need any more austerity measures this year. Speaking on SKAI TV, he said, “If we keep to the pledges we have made, we will not need a third support package and the danger of having to take new measures and make new cuts will be reduced.”
“If everything goes well, we expect and hope that the country will return to growth in 2013,” added Sachinidis, appointed last month to replace Evangelos Venizelos, who left to take over the leadership of the PASOK Socialist party before elections coming this spring.
The big “if” is whether Greece sticks to the reforms it pledged in return for the loans, but interim Prime Minister Lucas Papademos has said he’ll have to block some 96 amendments to reform legislation that were filed by his own ministers and Parliament trying to undercut the deals to favor certain sectors. And a senior finance ministry official told the newspaper Kathimerini that despite what Sachinidis said, Greece will still have to make more spending cuts this year. While revenues before tax returns grew by 3.3 percent in March, according to sources who spoke to the paper, that was attributed to the restructuring of outstanding debts. Greece has imposed losses of 74 percent on private investors to gain a $134 billion write-down in debt to go along with a second bailout of $173 billion.
In a special report on Greece, Fitch ratings said that despite the debt write-down, there is still a material risk of a Greek default and suggested that there would be no substantive recovery in the Greek economy until 2014. Investment fund PIMCO predicted this week that Greek debt would have to undergo a second so-called haircut of debt write-down. Analysts have said that would likely mean forcing losses on the public lenders who are giving Greece its only source of loans as the country has effectively been locked out of the private markets by forcing losses on investors.
Sachinidis added in an interview with Mega TV that Greece may sign before the elections, which are due on May 6, an agreement with Switzerland to obtain the details of Greeks who have deposited money there. The government wants to check whether tax had been paid on this money before it was moved out of Greece. The country is losing more than $72 billion in revenues to tax evaders. No Member of Parliament listed any international bank accounts despite claims by some Greek officials that many highly-connected people have put their money outside of Greece, which is not unlawful unless it is not declared.

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