ATHENS: Greece should stick to its fiscal tightening plan, as an extension to repay its EU/IMF loans will not be enough for the country to overcome its debt crisis, the chairman of Piraeus Bank said in a newspaper interview on Sunday.
The debt-laden nation agreed last year a 110 billion euro ($150 billion) bailout with the EU and the IMF but concerns over its ability to service its huge debt in the future has prompted the European Union to examine ways to reduce the country's debt burden.
"Preparations for resolving the public debt issue, such as the repayment extension and decreasing the interest rate for the 110 billion euros...is certainly in a positive direction but it will not pull us out of the crisis automatically," Piraeus bank chairman Michael Sallas told To Vima newspaper.
"With a sense of responsibility, we should stick to the policy of cutting spending and restoring budget revenues to create primary surpluses which will overbalance annual debt servicing needs," he said.
Piraeus Bank, Greece's fourth-biggest lender, completed last week an 807 mln euros right issue to boost its capital, after it barely passed a stress test in July.
Hurt like other Greek banks by the country's debt crisis, Piraeus has aiming to reduce counterparty worries, regain access to wholesale funding and reduce dependence on the European Central Bank.
Last year, the bank offered to buy out Greece's stakes in peers ATEbank and Hellenic Postbank but withdrew its bid after the government took too long to decide.
The government has repeatedly called on its lenders to form stronger groups to cope with the effect of the Greek debt crisis.
But Sallas said that institutional weaknesses and current fiscal conditions in Greece did not favour such moves.
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