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Greek finance minister confident of returning to growth

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Greece's new finance minister, Euclid Tsakalotos, while speaking to the Financial Times, said he"didn't see any reason" why growth wouldn't return to the beleaguered European nation, a week after it re-elected the left-wing Syriza party with 145 of 300 parliamentary seats to form a new government.

[ATHENS] Greece's new finance minister, Euclid Tsakalotos, while speaking to the Financial Times, said he"didn't see any reason" why growth wouldn't return to the beleaguered European nation, a week after it re-elected the left-wing Syriza party with 145 of 300 parliamentary seats to form a new government.

Mr Tsakalotos said he expected Greece's creditors to conduct a formal review of planned economic reforms by end-November, and if the verdict is positive, Greece could begin debt relief negotiations to recapitalise its banks before Christmas, the FT reported.

The EU estimates that the Greek banking sector will need anything from 10 billion euros (S$16 billion) to 25 billion euros, but the exact amount needed would depend on the results of stress tests and asset-quality reviews.

The negotiators are keen to get it done by the end of the year when so-called bail-in rules kick in. These would mean that large depositors, including companies, would lose money as part of the recapitalisation programme, taking a haircut or charge.

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It is important for the government to begin reforms by October, as this would unlock a bailout funds tranche of 3 billion euros agreed upon in August, Mr Tsakalotos said while speaking to FT.

Greece and its international lenders reached an 85 billion euro bailout agreement on Aug 11, providing the country with some respite after a turbulent year marked by acrimonious talks with lenders, the imposition of capital controls and a three-week shutdown of its banks.

Mr Tsakalotos added that the new government would make a serious effort towards cracking down on wealthy Greeks suspected of tax evasion, the paper reported.

"It will be a central aspect of our policies, which will determine the success of the government, because it's the only way the Greek people will accept difficult measures that show we're all in the same boat," Mr Tsakalotos said to FT.

However, analysts see risks that the reforms demanded under the 86 billion euro bailout programme will not be fully implemented because of their unpopularity among Greek voters and in Syriza itself.

REUTERS

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