Greece ‘will struggle’ to meet targets

GREECE will struggle to meet austerity targets in the autumn, Finance Minister Michael Noonan has predicted.

Mr Noonan expects the Greek parliament to pass the latest austerity package this week which will see the EU and IMF release the latest tranche of bailout funds and prevent the country from going bankrupt.

But he cast doubt on whether Greece would ultimately fulfil all the commitments contained in the package.

“With the best will in the world, their administration doesn’t seem to be very effective. You know, in Ireland if you decide to tax bar stools and you give that instruction to the Revenue Commissioners, they’ll be taxed and there’ll be a yield.

“Tax in Greece and their collection system doesn’t seem to be very good, and it’s a matter of speculation as to whether they can fulfil the commitments they’re making or not,” Mr Noonan told RTÉ Radio.

The minister said the EU was more concerned about contagion from Greece spreading to bigger countries than to Ireland or Portugal, the two other member states currently in receipt of bailouts.

“I think at this stage the European authorities are more worried about countries like Spain than they are about Ireland or Portugal...

“The authorities that I’ve spoken to believe that they can prevent contagion spreading to Ireland and Portugal, but they have some concerns about the bigger European countries, and they’re going to draw the line there.”

Mr Noonan said the EU was gradually realising that the current crisis was a eurozone one, not just limited to Greece, Ireland and Portugal.

“In proportion to the wealth of Europe, the collective debt of Ireland and Greece and Portugal is not very significant,” he said.

“The problem with Europe is that they have been looking at the problem as a problem in the three programme countries, when in actual fact it is a problem with the eurozone itself and with the euro currency.

“And laterally they have been moving to see it in that light, and I presume they will bring other policy instruments forward as necessary.”

Separately, Mr Noonan defended his call last week for people to resume shopping in order to lift the economy.

“A lot of people don’t have money to spend and nobody knows it better than myself dealing with my neighbours and my constituents,” he said. “But there are people who are afraid to spend, and they have significant amounts of money because savings ratios are over 11%.

“Look, the economy is growing again... and you know, if you’re there with a clapped-out fridge, or a washing machine that doesn’t complete the cycle, now is the time to start thinking about spending some of your savings and doing the kind of the things you would normally do as somebody in work.”