Could Greece become the first eurozone economy to collapse as it struggles to fund its soaring public debt. Not so, says the country’s Prime Minister George Papandreou. His socialist government aims to cut the national deficit to 3 percent of GDP within two years, down from 12.7 percent today.
Papandreou, who came to power in October, says the use of inaccurate data by the previous conservative government hid the extent of the economic malaise.
Christophe Midol-Monnet, euronews:
Prime Minister, welcome to euronews. An unexpected high deficit, 12.7 percent of the GDP, jeopardizes the financial credibility of your country. So what are you ready to do to avoid mismanagement in national statistics in the future?
George Papandreou, Greek Prime Minister:
You are right. There is a credibility gap. And we want to make sure that Greece is credible. It is I think our major, right now, problem. And the first thing that we are doing in the next few days will be voting in Parliament an independent agency for statistics. Actually, not only an independent agency. There will be an independent agency where even the Eurostat will be on the board. And secondly, we will have a special unit for the Parliament, parliamentarians to be able to check, so that we have checks and balances, from the Parliament towards the government, to see that we are implementing the budget in a correct way and that our statistics are very transparent. We are a government of transparency. We have come in to fight both mismanagement, clientelism and corruption which unluckily have been one of the reasons we have lost resources and squandered them. And so, this is absolutely essential for us, first of all for the Greek people.
Euronews:In the current crisis, why did you insist so much on refusing foreign assistance, from the EU or from the IMF? Shouldn’t there be for example a duty of solidarity within the euro zone?
Papandreou:First of all, we are not asking for any extra funding from the European Union. We believe we dont need an extra funding. We need to put our house in order. And I believe we have had a vote of confidence from the international markets also, that we can, when we do need to go out to the markets to borrow, we do get the necessary funds. But of course, they are still expensive and we need to cut that down. And that we will do by showing that we are credible and we are cutting down our deficit. We do have of course assistance from the European Union through the structural funds and we will be over the next few years, absorbing apporximately 16 billion euros, which had been allotted to Greece. This will be important, if you like, for counterweighting the necessary cuts we will be doing, to put these in the development of jobs in education, infrastructure, green alternative energy, which is I think the area where we will be able to excel and create a new dynamic in our economy.
Euronews: But are you still in a position to tax the rich and help the poor. Or do you intend to shrink deficit by pay and pension cuts, the Irish way?
Papandreou: Well I think, I would say that we have a number of measures. One is of course the need that we create a more just tax system. A more just tax sytem means that there will be more tax for the richer. There will be a more equitable distribution. And this I think is also very important to create strong tax conciousness from our citizen because one of our problems in Greece is a wide tax evasion. If we didnt have wide tax evasion, we would not have this deficit problem righ now. So this is one of the areas. But at the same time, we are making big cuts in the budget and we are also making cuts specifically in the top ups, the bonuses that the public sector gets, cutting down therefore in those wages, particularly in the middle, top level of our civil servants. So, yes, we are taking other measures also. It is a combination. I would also add we are in the process of revamping our social security system, our pension system. We are now in a dialogue with our social partners. And by april we will have concluded.
Euronews: But farmers already went on strike. And other sectors should follow in late February. So, how can you ensure lasting support for your reform plans in terms of Greek public opinion?
Papandreou: I believe we will have the support because people understand that we must make a change. This has been our motto, our goal, what we were elected on. And I have called upon the farmers to understand. We are at the beginning of our government. We were elected only few months ago, a little bit more than a hundred days over. And the problems they are talking about have been around for quite a few years and cannot be solved from one day to another. So I do hope that the dialogue that we will have with them will allow us to get their support and make them an agent of change, for changing our agriculture also.
Euronews: Last question, about EU enlargement. What is your position on its future, towards Turkey and the Balkans? And which calendar do you see for it?
Papandreou: I have always been in favour of making sure that Turkey has the prospect of becoming full member. And Greece was instrumental in making this decision in the European Union in 1999, ten years ago. I then was foreign minister. I still believe in that. But it does mean that Turkey also lives up to its responsibilities. And we certainly have problems that we havent solved, some of them in our region – Cyprus, our Greece-Turkey bilateral relations, questions of religious and human rights. And I do look forward to a meeting with prime minister Erdogan. I have now invited him officially in Greece to discuss our relationship and of course Turkey’s prospects for the European Union.
As concerns the rest of the Balkans, Southeastern Europe, I think it is absolutely necessary to move forward and that we give a timetable which will help both mobilize the European Union institutions but also mobilize the countries in the Western Balkans, to do their reforms. The date that I have suggested, and I think that there has been a widespread appeal in our region, is 2014. 2014 is symbolic, one hundred years after the beginning of the first World War, which began in the Balkans. And that way, we can close a cycle of instability, tension, even sometime violence in the region, by incorporating these countries in the European Union.
Mr Prime Minister, thank you very much.