Finance minister George Papaconstantinou anticipated turmoil for the Greek economy on the international markets over the next few months, noting that the attitude of the markets towards the Greek economy was mainly due to the lack of credibility inherited from the preceding (New Democracy) government "which cannot be remedied in just a few days", speaking at a press conference on Wednesday at the Foreign Press Association (FPA) in Athens.

   The present PASOK government, however, will do everything necessary to regain the lost credibility, and up to the submission of the country's revised Stability and Growth program to the EU in January it will give constant indications of its intentions, Papaconstantinou noted, adding that those indications comprise measures and policies to reduce wasteful spending, increase the country's revenues and put the economy on a developmental course.

   Asked whether the Greek government bonds have faced speculative attacks, Papaconstantinou replied that "speculative games have always existed."

   "Unfortunately, they are a part of the operation of the markets and we have to live with them, but at the same time we are taking all the measures necessary to face them and ensure the fiscal indicators," the minister stressed.

   He further said that the 2010 budget recently tabled in parliament was a first, significant step in the process, as it reduces operational expenditures by 10 percent, suspends public sector hiring with the exception of the 'sensitive' sectors, changes the system of medical and medicinal supplies procurement, and abolishes the practice of taxation of revenues outside the tax scale.

   The mid-term program, which will be reflected in the revised stability and growth plan in January, will introduce a clear-cut "road map" for returning to a situation that will not mortgage the future and will contain the public debt, Papaconstantinou continued.

   He also noted that although Greece is under the protective umbrella of the euro, the government nevertheless was not complacent, and "everything depends on our own actions, decisions and determination".

   Questioned on changes to the taxation system and the relevant dialogue to begin soon, the minister said it will be a radical change to the taxation system with the introduction of a uniform tax scale that will encompass all revenues, the inclusion of dividends in the scale, the progressive taxation of real estate property, objective determination of the living income, and the corporate accounting system.

   He said there will also be a fair increase in state revenues, to be paid by "those who have", while the tax base will also be broadened and tax evasion will be stamped out. In tandem with the dialogue, the government is also proceeding with a reorganisation of the tax authorities and a revision of the taxation mechanism in order to tackle tax evasion, he added.

   Papaconstantinou also said that there will be a substantial reduction in the armaments programs in 2010 compared with the current year, followed by further reductions over the following years, stressing, however, that any reduction will take into consideration the country's needs and the battle-worthiness of the Armed Forces.

   Caption: ANA-MPA file photo of Finance Minister George Papaconstantinou.