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Athens. Crisis-hit Greece will emerge from recession at the end of 2011 after “two difficult years” when measures to cut spending and boost growth start paying off, the country’s development minister said on Tuesday.

“We have a difficult two years ahead of us, but I believe the measures will pay off and the exit from recession will be visible at the end of 2011,” Development Minister Louka Katseli said.

“What is important now is to work hard so that in a few years we will stop talking about a Greek problem, and talk about a Greek miracle,” she said.

The Greek economy is expected to contract by 4 percent this year, complicating the government’s titanic efforts to slash the budget deficit from 13.6 percent of output to below the 3 percent threshold mandated by the European Union by 2014.

The Finance Ministry said the economy was not likely to return to growth before 2012.

Greece narrowly avoided default by drawing on a 110 billion-euro ($137 billion) rescue loan set up on its behalf by the EU and the International Monetary Fund, the first ever involving a euro-zone member.

A first installment of 20 billion euros was released in the past two weeks to enable Athens to redeem a 9 billion euro bond.

But the massive bailout came at the cost of wage and pension cuts, tax rises and hiring freezes in Greece’s bloated bureaucracy, and the release of further loan installments depend on the application of the austerity program.

The measures have sparked four general strikes since February, including two this month.

Katseli said new legislation to facilitate investment would be ready by the end of 2010, while a law to boost domestic development would be approved in the early summer.

But the country’s unions have threatened to mobilize again when a controversial pension reform goes to a parliament vote this month.

The government this month presented a radical overhaul which would see an average reduction in pensions of seven percent by 2030, while the upper category of pensions would be cut by up to 14 percent.

The reform would also raise the average effective retirement age to 63.5 from 61.4, curbing Greece’s widespread early retirement schemes.

 

Agence France-Presse