Greek socialist party leader promises no new taxes

Associated Press
Greece's Socialist party leader Evangelos Venizelos speaks to party supporters during a pre-election rally in Athens, Saturday April 28, 2012. The former finance minister said he expected no single party to be able to form a government after the vote and noted that if his party, PASOK, were to enter a coalition a priority would be to slowly wean Greece off the restrictions of two emergency loan agreements and into self-sustaining growth by 2015.(AP Photo/Kostas Tsironis)
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ATHENS, Greece (AP) — The socialist party leader predicts a coalition will rule Greece after the May 6 election, and says if his PASOK party is involved there will be no new taxes, or across-the-board wage and pension cuts.

Speaking Saturday in front of a select audience of party officials, Evangelos Venizelos said the country would also be able to resume self-sustained growth, and wean itself off the restrictions of two emergency loan agreements by 2015, if PASOK is involved.

Debt-laden Greece signed the two agreements with the European Union, European Central Bank and International Monetary Fund to help stave off certain bankruptcy and provide time to make reforms that will allow it, eventually, to seek funding from the markets and reduce its debt from 165.4 percent of GDP at end-2011 to 117 percent in 2020.

Venizelos — the former finance minister — added that the slashing of more than half of Greece's privately held debt, an agreement he helped negotiate, will help inject an estimated €50 billion ($66 billion) into the market over the next three years and a stable tax regime over the next ten years will boost growth.

The bulk of the liquidity injection, said Venizelos, would come through bank loans worth 30 billion, of which 20 billion would come from "liquidity and growth" pacts the government and the banks would sign, and the other 10 billion from the 70 billion he expects Greeks to either repatriate or take out of stashed reserves, and redeposit with Greek banks.

The banks themselves, which will be recapitalized to the tune of €50 billion to make up for bond swap losses, will be brought "under state control ... but will not become the kind of state enterprises we have known in the past," he said.

Venizelos also said privatization of state property will bring in €19 billion to state coffers over "the next several years."

The Greek vote coincides with the runoff for the French presidential election, with fellow socialist leader Francois Hollande consistently ahead in polls — although President Nicolas Sarkozy is working hard to close the gap.

Hollande's election, Venizelos said, would open the door, for "a more creative, optimistic and effective way" to overcome the European Union's fiscal crisis, in contrast to the "one-dimensional" austerity policies applied now.

Venizelos warned, however, that not abiding by the loan agreements Greece has signed with its creditors, as several parties propose, would be "a tragic adventure" that would destroy incomes, jobs and the country's banks.

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