PARIS (MNI) – It will be difficult for Greece to further raise
taxes and privatizing state assets is no simple task, Greek Deputy Prime
Minister Theodoros Pangalos said Monday.

“Wage earners cannot take more taxes,” Pangalos told journalists at
the European American Press Club in the French capital. “Salaried
workers at the lower end of the scale are already at their limit,” he
said, adding that the situation was already “intolerable from the social
and economic point of view.” It would be simply “bad manners” to ask
more of workers such as teachers and plumbers, he said.

To raise more revenue, Athens is looking more towards stamping out
tax evasion among the self-employed with the help of technology that
experts from fellow Eurozone countries are helping to install, he
explained.

The solution to Greece’s debt problems are first and foremost
financial rather than structural, said Pangalos. “I don’t think Greece’s
problems should be solved on the basis of ideological options,” he said,
speaking about structural reforms. “The problem ahead of Greece is to
solve its public finances, not to transform Greece into a model economy
of the IMF.”

“Further structural reforms,” as requested by EU and IMF officials
reviewing whether Greece should receive a vital E8 billion tranche of
aid, “can mean anything,” he said. “If you’re talking about getting rid
of the present management of the railway that makes a loss, than yes, I
agree. If it means abolishing the public health system, than no, I don’t
agree,” said Pangalos.

Greece is prepared to discuss matters with “everyone” interested in
participating in a privatization of state assets but the situation is
not so easy, he said, citing the collapse in stock market values
worldwide.

While the government believes that some assets should remain in
state hands, other assets the government could be interested in selling
were proving unattractive to investors, Pangalos explained.

“We are very happy to privatize part of the public sector, but some
parts should remain part of the state,” he said.

While Athens has sought investors in Europe and China to take a
stake in Greece’s money-losing state railway company, the government has
so far received “no offers,” and there seemed to be “no demand,”
Pangalos said.

Officials from the EU, IMF and European Central Bank are expected
to complete by the end of the month a report that could determine
whether Greece receives the vital next tranche of EU-IMF aid that it
needs to pay state workers’ salaries and pensions.

While they have made positive comments about Greece’s progress in
tackling its budget deficit, even though it still expected to exceed
agreed targets set as conditions to the aid, officials including
Jean-Claude Juncker, president of the Eurogroup, have lamented Athens’
failure to kickstart its privatization programme and called for more
progress on structural reforms, to which the financial aid is also tied.

–Brussels bureau, +324-952-28374; pkoh@marketnews.com

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