BUSINESS
09/21/2011 06:04 EDT | Updated 11/21/2011 05:12 EST

Greece Debt Crisis: Finance Minister Says More Austerity Measures Needed

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ATHENS, Greece - Greece will have to take fresh austerity measures, the debt-ridden country's finance minister said Wednesday, a day after Athens moved a step closer to getting the vital bailout funds it needs to avoid a disastrous default next month.

"Do we have to take new measures? Yes, we have to take new measures," Evangelos Venizelos said in Parliament ahead of a Cabinet meeting, without specifying what they would be.

The minister said that without the supervision of debt inspectors from the European Central Bank, the International Monetary Fund and the European Commission, collectively known as the troika, Greece would have "slipped off the fiscal track."

The troika has been pressing the Greek government hard to adhere to the reforms it agreed to in return for bailout money. In particular, the inspectors want it to move faster in reducing the size of the bloated public sector.

Their quarterly reviews of the country's progress is essential to the country's international creditors releasing funds from a €110 billion ($151 billion) bailout loan that has been keeping Greece afloat since last year.

Measures taken so far include pension and salary cuts in the public sector, and a series of tax hikes on everything from food and fuel to property and income.

The troika suspended its current review in early September amid talk of missed targets and delays, and Venizelos held two critical conference calls with them on Monday and Tuesday.

Brussels and Athens said progress had been made in the calls, and the troika heads are due back in the Greek capital next week — a clear hint that the next batch of bailout cash amounting to €8 billion ($11 billion) is likely to be released.

Venizelos conceded that it was a "humiliation" for Greece to ask for loans and to be under international supervision, but that the country had to if it was to avoid a more a calamitous outcome.

"If we did not have the supervision of the troika ... we would have again unfortunately slipped off the fiscal track," he said. "Just as the country derailed in an unprecedented away between 2004 and 2009. It's not a question of intent. It's a matter of mentality, lack of ability, management structure, methods, habits, and inertia."

Greece has been struggling to persuade its creditors that it deserves to receive the next installment of its bailout. Without it, the country only has enough funds to see it through mid-October.

After the troika suspended its review in early September, the government hurriedly announced an extra property tax, to be paid through electricity bills to make it easier for the state to collect.

State electricity company unionists have threatened not to collect the tax and not to cut off the electricity supply to those who refuse to pay.

"The choices we are making are, unfortunately, absolutely necessary," Venizelos insisted.

"When you are borrowing money, you are obliged to consider the opinion of the lender," he said. "There is a negotiation. And of course the strong party is the one who pays out, not the one who receives. That is of great importance."