Papandreou Determined to Go ahead with Austerity Measures

The Greek Prime Minister speaks to Greek American media in New York. Invitation to U.S. businessmen to invest to Greece.

New York.- In an exclusive interview with FOX Business Network’s Nicole Petallides, Greek Prime Minister George Papandreou talks about the debt crisis and measures the country is taking to reassure investors, pay back loans, and prevent such a crisis from happening in the future. He also invited American investors to invest to Greece.

Here are the key highlights from the interview, courtesy of FOX Business Network:

On the international community response during the crisis:

“Let me thank President Obama and the people of the US for the support we have had in this difficult crisis. We were a weak link but this was an international crisis. President Obama has been very supportive in the idea that we do need to see how this international financial system works. We have high hopes that important decision will be made to create a level playing field, a transparent financial system which will be to the benefit of the world economy.”

On any doubts about being able to pay back the loans:

“As prime minister of this country that is my main purpose only to pay back those loans but to be a competitive economy. And Greece has great potential. We have created this package to reassure investors that we will not default. We are turning the corner in this crisis and moving. People see that this EUI package gives an assurance that Greece is on a good track and it’s a good bet to invest in Greece.”

On whether it is safe to invest money back in Greece:

“We will absolutely honor our signature. We are a new government. We have come in with a message of change. We have to make the changes. In the last 6 months we have cut down out deficit by 40%. We have increased taxes, cracked down on tax evasion, cut down expenditure and we have had to take some very harsh measures cutting wages in the public sector by 20%. This shows our determination to be on track.

On tax evasion:

“We are bringing in all kinds of transparency measures. We are also creating a new culture I would say where an incentives to have people to live up to the responsibilities.”

On the morale of the people in Greece:

“The wide majority of the people, even though these measures are difficult, they say ‘ok this is also an opportunity to change our country. We are paying for it, we don’t like it, but we have to do it, its for Greece, its for our country its for our families its for our future but at the same time we also want to make Greece a more transparent country a more open to business brining in investment and we are already doing that.”

On the back tax:

“Taxes all commercial transactions and that has gone up 4%. There is a shadow economy or informal economy that is not registered and that will be taxed and bring in new revenue into our public sector and paying back our loans.

WITH GREEK-AMERICAN MEDIA

Prime minister George Papandreou expressed determination and optimism on the Greek economy and reversal of the negative climate, while he also stressed the “decisive role” that overseas Greeks can play in the strengthening and growth of Greece, during a press conference to the Greek American media in New York on Sunday, June 20. The Greek premier, who is also president of the Socialist International (SI) spoke on the economy and on foreign policy issues to the Greek American media, ahead of an SI Council dinner. Papandreou was in New York for an SI Council meeting, the session of which wrapped up on Tuesday. On the sidelines of the Council, he met with several foreign heads of state and government attending the Council, while on Monday he met with UN Secretary General Ban Ki-moon.

“We already have the first positive results of the measures we have taken, with respect to the deficit,” Papandreou said, stressing that two days before the last general elections, the previous New Democracy (ND) government had presented figures to the EU that the deficit was just 6 percent of GDP, whereas when PASOK took office it found a deficit of above 12 percent.

“That alone was enough to shatter the country’s credibility. We (the new PASOK government), therefore, had to rebuild, and we are rebuilding step by step, with hard work and pain. It is hard to build credibility, and easy to destroy it,” the premier said.

Papandreou announced that a parliamentary fact-finding commission will be set up on the economic crisis, noting that it would concern the recent period, while it would also investigate the practices of various banks from the past onwards, including American banks. Depending on the outcome, judicial proceedings may also be launched, but this could not be said definitely in advance.

The premier also spoke warmly of the Greeks of the Diaspora, and thanked them for always standing by Greece. He also spoke of an upgraded strategy of the government regarding the Hellenism of the Diaspora aiming at strengthening the bonds on a new basis, with emphasis on the transfer and utilization of the knowhow of the overseas Greeks in the materialisation of the necessary institutional reforms in Greece.

On the huge ecological disaster in the Gulf of Mexico, Papandreou expressed support for US President Barack Obama and the American people, and particularly the residents of the affected areas, stressing that this tragedy highlights the need for clear-cut rules and controls on such major companies. “We saw this two years ago with the banks, now we see it with the oil companies,” he added.

Turning to foreign policy, the prime minister spoke about the FYROM name issue, relations with Turkey, the Cyprus issue, and his government’s 2014 Initiative for the accession of all the Western Balkan states to the EU by that date.

On FYROM, Papandreou said that Greece’s position for a composite name with a geographical qualification in effect for all purposes (ergo omnes) is well known, adding that “we have taken initiatives so as to contribute to a better climate” and expressing hope that the UN-mediated talks will have a positive outcome.

On Turkey, he said the government acted immediately and recently 22 new agreements were signed. Papandreou said that he will meet again with Turkish prime minister Recep Tayyip Erdogan in a couple of days in Istanbul, and also with Ecumenical Patriarch Bartholomew on matters of concern to the Ecumenical Patriarchate which are also Greek and European priorities, such as the reopening of the Halki Seminary and respect of the religious minorities and their properties.

“We have also proceeded with a joint initiative with Turkey on the Mediterranean and in an initiative for green growth that also includes Lebanon, Libya and Egypt,” he said, adding that he discussed this issue earlier in the day with Jeffrey Sachs (economist and professor at New York’s Columbia University, the author of a book on climate change), who “confirmed to me that the Mediterranean is one of the areas most affected, perhaps more than any other area on earth”.

“But the Mediterranean is not being heard, and our goal is to be heard and to become demanding and a nuisance for its salvation,” he added.

On the Cyprus issue, Papandreou said that Greece supports Cyprus President Demetris Christofias, who is making earnest and painful efforts in the negotiations, “and of course constant pressure is needed here on the Turkish side to contribute to a substantial promotion of solution within the framework of the UN resolutions and the European acquis”.

“We always impress the fact that the Cyprus problem is primarily a problem of occupation,” he added.

Finally, on the Balkans, Papandreou said that his government has advanced the idea of setting 2014 as the landmark year for the accession of the western Balkans to the European Union, a development that will improve not only the economy but also the tranquility of the region, and added hope that there will be a parallel process that will contribute to solving the major problems, such as the FYROM name issue and also Kosovo.

INTERVIEW WITH BLOOMBERG

If Greece is to overcome the crisis, it must show the same sort of team spirit that allowed Greece’s national soccer team to win its first game in the World Cup, Prime Minister George Papandreou stressed in an interview broadcast live by Bloomberg radio on Sunday. He once again ruled out all possibility of Greece defaulting.

The government is taking all measures necessary to regain the trust of markets and has succeeded in significantly reducing the country’s deficit, either by reducing spending or by increasing tax revenues, he added.

“Markets need time to see and assess the results of the effort,” Papandreou said, noting that the bailout package with the EU, European Central Bank and IMF would buy the time needed for the government to complete a programme of reforms.

The Greek prime minister then outlined the efforts underway to make changes in the public sector, the social insurance system and to stamp out bureaucracy in order to promote growth. He also stressed the investment opportunities in Greece, especially in the areas of green growth and tourism.

He admitted that some of the measures imposed were unfair and the discontent they caused understandable but underlined that they were necessary in order to pull the country out of the crisis.

“The Greek people understand this necessity. The economic crisis must become an opportunity to change for the better,” he said.

MEETING WITH BAN

The Cyprus problem was on the agenda of a meeting UN Secretary General Ban Ki moon had here on Monday with Greek Prime Minister George Papandreou, who stressed that putting ”mechanistic datelines, does not often help us find a solution.”

In statements after the meeting, Papandreou said ”we do believe that there should be a Cypriot solution, that is the two communities on their own, without outside interference and intervention be able to find a solution and of course without a mechanistic approach to timetables, a solution based on UN resolutions and of course based on the European acquis, where Cyprus is of course a member.”

Invited to comment on reports in the Greek Cypriot press that the Government of Cyprus was complaining because the UN was kind of imposing time-limit on them for a solution Papandreou said they did not talk about time-limits with the Secretary-General.

He added that ”we need to find a solution and the sooner the better. But to put mechanistic datelines, does not often help us find a solution. So I think what we need to do is to focus, use this opportunity to focus on the solution for Cyprus.”

Asked about his forthcoming visit to Turkey, Papandreou said he has been invited to go there. ”There is the Southern-Eastern Cooperation Initiative and the Balkan meeting of leaders of the region which is taking place in Istanbul in Turkey on Wednesday, I will be there and I think it’s both a message to our region of the need and the desire for closer cooperation but also again I will stress the will on our part and I believe this is the will also of the Turkish people but I am sure also that Prime Minister Erdogan is very much in favour of breaking through in some of the difficult issues that they have dogged us over the years and so we can move forward.”

He added that ”there are so much that we can do together. The last meeting that Prime Minister Erdogan and I had in Athens we signed 22 agreements. That just shows that we have the capability to move forward. Let’s deal with the difficult issues and solve them and move forward. Whether helping on the Cyprus issue, whether it’s the continental shelf we can solve these problems,” Papandreou noted.