Greece

The next governor of Greece’s central bank will be Yannis Stournaras, a Greek economist and former finance minister who led a two-year austerity drive that stabilized the economy but fueled a social crisis, the International New York Times reported. The announcement on Wednesday, by the General Council of the Bank of Greece, followed a sweeping cabinet shuffle on Monday that installed Gikas Hardouvelis, another economist and former government adviser, as Greece’s new finance minister.

Greece’s senior tax collection official left his job on Thursday in a development that prompted the European Commission to express “deep concern”, the Financial Times reported. Haris Theoharis, secretary-general for public revenue, said he was stepping down for “personal reasons”, but made clear he had come under pressure for failing to crack down sufficiently on wealthy tax evaders. “I leave with my head high,” he said, announcing his resignation.

Greece is far from saved. The recovery is weak and poverty is endemic. Greece, Greek Finance Minister Yannis Stournaras says, needs one more big fix: A great bleeding chunk of flesh needs to be taken out of its mammoth debt load, equivalent to 170 per cent of gross domestic product, the highest in Europe by a long shot (Italy is second, at about 135 per cent). “The debt is high and we want to lower it to make the annual amortization payments and interest payments lower so resources can go more to growth and investment,” he said. “We badly need investment and growth to bring down unemployment.

German finance minister Wolfgang Schäuble reckons a third bailout for Greece will be less than €10 billion, significantly smaller than each of the previous aid packages, German magazine Focus has reported. Greece was cut off from markets in 2010 as the true scale of its debt burden became apparent. After four years of painful measures to contain debt, two bailouts totalling €240 billion and a hit on private bondholders, the Greek economy is expected to return to modest growth this year.

An anti-bailout party that is leading Greek opinion polls ahead of this weekend's local government and European elections vowed Thursday to scrap international agreements that rescued the country's economy from bankruptcy at the cost of harsh austerity, the Associated Press reported. Three opinion polls also published Thursday found that support for the left-wing Syriza party was 2.5 percent to 3.2 percentage points ahead of the conservative New Democracy party, which leads Greece's coalition government.

The warning comes after the central bank pressed Greece’s four largest lenders to set up “bad bank” divisions to tackle non-performing loans, which amount to 33 per cent of total lending of about €220bn. However, the banks have so far been reluctant to pull the plug on corporate borrowers unable to meet payments on their debt. “Following such a deep crisis we need strong consolidation [of the economy],” George Provopoulos told the Financial Times.

Greece’s mountain of debt will decline more slowly than previously expected, the European Commission said in a Friday report, the International New York Times reported. As the country’s recovery from a debilitating recession creeps only slowly ahead, the report said, Greece’s effort to lower its nearly 319 billion euro debt by selling off state assets continues to miss targets.

Greece's international creditors have agreed to cut its privatization target for the current year, the head of the country's asset-sale agency said Thursday, The Wall Street Journal reported. The asset sales target has been lowered to €1.5 billion ($2.06 billion) in 2014 from a previous figure of €3.5 billion, Ioannis Emiris, chief executive of the Hellenic Republic Asset Development Fund, told reporters. The target has also been revised for the next year to €2.3 billion, slightly higher than the previous target of €2 billion.

Euro group president Jeroen Dijsselbloem said yesterday it was too early to say if Greece would need a further bailout when its EU programme finishes at the end of this year. He said he would return to the issue in September, the Irish Times reported. The head of the euro group of euro zone finance ministers was speaking as those ministers signed off on an €8.3 billion loan to Greece, in one of the final major tranches of loans due to the country under the terms of its second bailout.

Greece’s parliament has approved a structural reform package agreed with international lenders, opening the way for disbursement next month of a €8.3bn aid tranche from its €172bn second bailout by the EU and the International Monetary Fund, the Financial Times reported. Lawmakers backed the reform package by 152 votes for to 135 against with one abstention following a 14-hour session of highly-charged debate.