Greek minister: ‘Grexit not possible’

Greece’s Minister of Administrative Reform George Katrougalos vouches for agreement with international creditors

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Greece’s Minister of Administrative Reform, George Katrougalos, on Tuesday said, the possibility of Greece exiting the eurozone (Grexit) is not a scenario acceptable for the nation.

Katrougalos expressed his views prior to Greece’s final chance to propose a new reformation programme to its eurozone partners on Tuesday

Katrougalos says, for a start, Greek banks simply need liquidity: "It’s relatively easy to resolve this problem. I hope that within this week an agreement will be reached. Grexit is not an acceptable scenario for us."

Speaking to Anadolu Agency, the minister says Greece’s future lies in the eurozone.

He further added that the banking system must normalise as soon as possible. "But this is dependent on the decision of the European Central bank. We are ready to make concessions provided that the other side would also make similar ones," Katrougalos said.

Since Greece declared its default as a result of failure of bailout negotiations with its lenders last week, the Syriza-led Greek government had decided to close all banks in order to preserve further escalation of its financial market.

Greek government announced on Monday to prolong the closure of banks at least for a few more days as money liquidities were shrinking following the mass pull outs.

However, Deputy Finance Minister Dimitris Mardas said on Tuesday that Greece had no trouble paying public sector salaries for the month of July.

"We are not facing any particular problem in paying public sector salaries [on July 13]," Mardas told state TV ERT. "Based on what we know so far, they can be paid normally."

In a Sunday referendum, Greek people voted "no" with a 61 percent to the bailout terms imposed by the country’s negotiators, including the European Commission, European Central Bank (ECB) and the International Monetary Fund (IMF).

The Greek Prime Minister Alexis Tsipras, who reassured his political support through the referendum against the international creditors, was expected to unveil his government's proposals on Tuesday when the eurozone countries would re-negotiate Greece’s bailout terms at a hastily-arranged emergency summit in Brussels.

After the euphoria of the referendum that resulted with a major victory of no vote camp promoted by the Syriza cabinet, the Greek finance minister Yanis Varoufakis stepped down on Monday.

Tsipras immediately appointed Euclid Tsakalotos, a 55-year-old economist, as the new finance minister instead of Varoufakis, who had previously clashed with the creditors, ahead of the Tuesday talks in Brussels.

The new finance minister reportedly arrived for the Eurogroup meeting with no concrete proposals, according to Greek media.

Greece’s left-wing Syriza Party has so far not agreed on a number of issues, such as debt restructuring, a lower target for the primary surplus to take in more than it spends apart from debt interest payments, and a pledge to make no further cuts to pensions or wages.

Athens has been negotiating with its creditors, the IMF and the ECB, over the past several months about the release of some 7.2 billion euros in aid.

The country is heavily indebted to the EU and the IMF, almost 240 billion euros, since the eurozone economic crisis seriously hit the country’s economy from 2009 to the present.

The failure of the negotiations would lead Greece to default, one of the most likely scenarios which might also mark a historic blow to the EU's most ambitious project, the common currency usage, euro.

TRTWorld and agencies