Politics: PM: Changes were essential, even without debt crisis

Even if Greece had no debt or deficit problem, the radical changes made by the government would have been necessary to avoid debts and deficits in the future, Prime Minister George Papandreou told a meeting of his cabinet on Wednesday.

"The emergency measures that we took last year were essential and their aim was to save the country," he emphasised in a review of the government's course until now.

Papandreou said that PASOK had sought power in order to make major changes and that its policies sought to create the conditions to change people's lives for the better.

"We want Greece to be open and fair and economically strong and stable," he added, noting that the changes to economic policy, the state, health, the labour market and education were "self-evident" and should have been made years ago.

The prime minister urged a final break with clientelist politics and asserted that the vast majority of the electorate support the effort for change.

"Everyone, regardless of what they voted for, wants the country to change," he said, noting that anyone doubting the government's legitimacy need look no further than the answer given by voters during the local government elections.

Papandreou referred to what he called Greece's "significant successes" - citing the negotiations in Europe where he said Greece was now "an active part of the solution" and noting that a battle of weeks or months lay ahead for an overall solution to the debt issue.

He said that an overall solution for debt should be based on three pillars: fiscal discipline and sound economic management by individual member-states, transparency in financial markets and economic growth.

Europe's answer to the debt crisis fell in the first category, Papandreou asserted, noting that the common currency had also shown up certain imperfections. Among these he listed the alternation from too easy access to credit from the markets, which was then directed toward projects that were not particularly helpful, and the extreme difficulty in accessing markets recently experienced by Greece.

On the issue of transparency in the financial system, the prime minister said the aim was to regain trust and facilitate liquidity and the need to resolve the issues arising with the various tax havens around the world, among them Switzerland. He also noted the need to look into the issue of credit rating agencies.

On boosting growth, Papandreou said that cost of labour was not a central factor and pointed to the need to improve quality and competitiveness through better infrastructure, unification of European networks in energy, electricity and broadband and on facilitating the internal market through e-commerce.

Commenting on an EU Competitiveness Pact proposed by France and Germany, Papandreou said that this needed to be discussed and that it must not stand in the way of EU decision making.

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