ATHENS, Greece – GREECE promised to stick with tough austerity measures yesterday, holding out hope for a debt-relief deal with emergency creditors, but the country’s prime minister conceded that the tax collection system was in need of major reform after it had “essentially collapsed”.

“No, we have not overcome the crisis yet, but light is beginning to appear at the end of the tunnel,” Prime Minister Antonis Samaras told a business conference late yesterday. “No one is betting on a Greek exit from the euro anymore.”

He spoke the day after Greece struck a deal with rescue creditors expected to secure it ¤8.8 billion (US$11.55 billion) in further loan payouts. The agreement followed weeks of tough negotiations and will include a taboo-breaking 15,000 layoffs in the public sector.

Greece, which is in its sixth year of recession, is struggling to achieve a primary budget surplus — which excludes the cost of servicing the huge public debt — in 2013, with hopes of winning further debt relief from its creditors.

Samaras also promised to bring down taxes after balancing the budget, but acknowledged difficulties in repairing the government revenue mechanism, which had failed to hold large numbers of Greeks accountable for paying their taxes.

“It is necessary to change our tax system because it had essentially collapsed in a frenzy of unprecedented tax evasion,” he said.

Greece has been locked out of international bond markets since its economy imploded in 2010, and many feared the country would have to leave the group of countries that use the euro currency. The Greek economy has since been kept afloat by rescue loans from European partners and the International Monetary Fund, in exchange for harsh austerity measures that have fed the recession.

“We still face a hard road ahead, until Greece can access markets again,” Finance Minister Yannis Stournaras said earlier yesterday. “But we have covered at least two-thirds of the way, as far as fiscal adjustment goes, and three quarters of the way on competitiveness.”

The deeply resented austerity measures included slashing incomes, hiking taxes and overhauling an inflated, largely inefficient public sector. The cuts sent unemployment to a record 27 per cent, with almost 1,000 jobs have been lost every day over the past three years in the private sector.

Opposition leader Alexis Tsipras said the measures have left “social wreckage” in their wake, and urged action to revive the economy.

“Every year, recovery is delayed until the following year,” said Tsipras, who leads the left-wing Syriza, urging a major change in policy to swap austerity measures with economic stimulus programmes that involve spending money — “the same way a heart attack patient needs an electric shock.”

Samaras formed a coalition government after elections last June and his conservative New Democracy party currently has a slim lead over Syriza in opinion polls.

— AP