ATHENS, July 1: Greece's economy will slump further before starting to expand again next year thanks to fast injections of EU funds and reforms to spur growth, new Finance Minister Evangelos Venizelos told Reuters on Friday.

In his first interview to international media since being appointed last month, Venizelos pledged to accelerate efforts to sell off state companies and crack down on tax evasion, saying violent anti-austerity protests masked a high level of political consensus on the need to reform and keep Greece in the euro zone.

He said the economy would shrink by 3.9 per cent this year but would need to return to growth if Greece was to make progress cutting its enormous public debt.

“This is our obligation, our hope and our target: to return to growth next year. Because without growth it is not possible to achieve our strategic targets,” he said.

The comments came a day after the Greek parliament approved the second of two sweeping austerity bills that cleared the way for the European Union and International Monetary Fund to release a 12 billion euro ($17 billion) loan tranche Athens urgently needs to stave off bankruptcy.

Venizelos, a ruling party heavyweight who has held several portfolios and prepared the successful 2004 Olympics, said his dual role as deputy Prime Minister would give him the authority to push the measures through and put Greece back on track to meet targets set in a 110 billion euro EU/IMF bailout.

He said his top priorities were to reform an inefficient tax system and launch an ambitious privatisation plan slated to rake in 50 billion euros by 2015.“The Prime Minister and I can coordinate the system in a fast and efficient way,” he said.

“Implementation is difficult, of course. This is why we cannot waste a single hour. I have instructed my staff that each day must count for a month.”

Venizelos was picked in a cabinet reshuffle on June 17 to replace George Papaconstantinou, who lost the post after missing key revenue targets due to persistent tax evasion and was slow to launch crucial privatisations.

“We will set up immediately the sovereign fund for privatisations to achieve the target set for this year and until 2015. The 2011 target is feasible because it involves assets that are not burdened with complicated legal issues,” he said.

According to the bailout plan, Greece must raise 5 billion euros from state selloffs this year and another 10 billion in 2012. So far, no privatisations have been completed during the socialists' 19 months in power.

Many economists have questioned whether the privatisation target is realistic, given fierce opposition by Greek unions, which have held rolling strikes to protest the sale of state companies including electricity group PPC.

But Venizelos said a series of public utilities, ports, banks and other state assets slated for sale this year would go fast and he was already preparing the ground for more complicated privatisations down the line.

“The participation of the Greek shipping community in the privatisation effort may be decisive. I will meet their representatives next week to discuss their problems and their concerns,” he said, raising hopes Greece wealthy shipowners may be interested in some of the assets.

Failure to battle rampant tax evasion has been blamed for missing revenue targets, requiring a fresh wave of unpopular measures to plug the hole.

Venizelos said a new tax law addressing such weaknesses will be in place in a few weeks.

This would include steps such as giving authorities access to bank transactions and setting more rigorous criteria for capturing undeclared income.

“We can't be asking the Swiss for data while we can't access our own,” he said.

The state would cooperate with private auditing companies and other countries for the first time and any changes would be fiscally neutral.

“We want to further increase our revenues and cut spending to be comfortably within our targets. We want this tax law reform to boost simplicity, stability and justice and to boost economic growth,” he said.

Venizelos said gross domestic product would contract by 3.9 per cent this year, more sharply than the previous government forecast of 3.5 per cent shrinkage, and unemployment would reach 16-17 per cent this year.

“Every unemployed person is unemployed 100 percent. The pro-growth measures will make Greece business-friendly and benefit workers,” he said.

Greece was at an advanced stage of agreeing to frontload available EU funds while easing rules which require matching funds from national governments to get quick money injected into the slumping economy, he said, while measures were taken to cut red tape.—Reuters