Finance Minister Yiorgos Papakonstantinou says the government has decided to "immediately proceed" with the sale of state stakes in several major enterprises as part of efforts to deal with Greece's financial crisis.

In a statement released after a Cabinet session that lasted several hours Monday, Yiorgos Papakonstantinou said the ministers decided to privatise the state's stakes in the OTE telecoms company, Postbank, the ports of Thessaloniki and Athens and the Thessaloniki water company.

The issue of privatisations has been one of the key points raised by European officials, with EU Monetary Affairs Commissioner Olli Rehn saying in Vienna Monday that Greece must urgently speed up its €50 billion privatisation programme.

The minister also said the meeting reaffirmed the government's determination to continue with the fiscal consolidation programme by taking additional measures of over six billion Euro or 2.8% of GDP in order to achieve the 7.5% deficit target for 2011.

Papakonstantinou stressed that the detailed measures together with the full medium-term fiscal strategy aimed to bring the deficit close to 1% of GDP by 2015 will be announced once the ongoing current review of the programme by the EU/ECB/IMF team is concluded and after consultation with the other political parties.

“Following the unprecedented reduction of the fiscal deficit by five percentage points in 2010, and the wave of structural reforms in pensions, the labour market, budget, tax and business environment, the government is determined to continue and accelerate the path of fiscal consolidation and structural reforms,” Papakonstantinou noted.

PM Papandreou

The battle to save the country is continuing, and no cowardice can be forgiven in serving this patriotic duty, Prime Minister George Papandreou told the Cabinet meeting held to discuss the government's Medium-Term Economic Program.

Last year, he said, "with the government's decisions and the Greek people's sacrifices, we averted bankruptcy and, just like a year ago, today we are taking the decisions needed to permanently avert the danger and to permanently change the country."

"We averted the threat of the country's bankruptcy and placed the country on a track of streamlining and growth. Back-stepping is not allowed, we have a duty to the country and to the Greek people to ensure our future course," the premier added.

Government spokesman

On his part, government spokesman Yiorgos Petalotis told reporters that initiatives will be included in the Medium-term Fiscal Framework for the decrease and more effective functioning of the public sector (decrease in employees and salary cost, merging and abolition of agencies, public utility restructuring, decrease in operational expenditures, decrease in defence expenditures), the better targeting of social expenditures and the rationalisation of health expenditures, the widening of the tax base and the combatting of tax evasion and contribution evasion.

"Moreover, the supplementation of the Medium-term Fiscal Framework with a series of political initiatives to speed up major structural changes that bring investments, jobs and growth, and create the preconditions for speedier recovery and support for the more vulnerable social groups.

"The Medium-term Fiscal Framework and the policies supplementing it constitute part of the "road map" for the exit from the crisis and the country's radical change," Petalotis said.

"Therefore, the wider solidarity and social agreement possible on the targets it sets as well as the ways for us to achieve them is necessary.

"In this framework, the prime minister has already invited the party leaders on Tuesday for the beginning of a procedure on the convergence of views that will be set out in the legislative texts that will be tabled in Parliament as well as the continuation of our country's support programme," the spokesman concluded.