Greek Prime Minister George Papandreou called on Tuesday evening for a "nation-wide understanding within the country" for an exit from the serious economic crisis currently plaguing the country.
Addressing an Economist conference titled "In the aftermath of the global economic crisis: what next" that began on Tuesday at a sea-side resort east of Athens, Papandreou said that the "primary necessity is to have a new nation-wide understanding within our country."
"Experiences in recent years, the tough reality and truth on our conditions, do not allow for embellishing the situation or offering magic recipes. They all call for a serious and responsible stance, persistence and commitment on the part of us all.
And this must be communicated and expressed by all, society, business people, social partners and political party leaders alike. This is a national necessity for us: we have to change Greece. And indeed show that everyone everywhere understand this," the premier told his audience.
"In order to restore sustainable economic growth, fiscal consolidation remains our number one priority. That is why we have just tabled an ambitious mid-term fiscal adjustment program for 2012-2015, which includes extensive privatisations, economies of scale in the public sector, minimizing waste in public spending, and restructuring our production model," Papandreou noted, adding:
"We will undertake any additional policy measures necessary to ensure that we meet the original fiscal targets we set in 2011. What is needed to be done from here on? (1) a robust 4 year program, our program, which guarantees that we are moving. Implementing policies and all the necessary major changes in our society. It is technically called ‘a midterm program’, yet it is nothing less than a small revolution. One of restructuring our institutions, our society, our economy. One that moves from austerity to structural changes, programs to fight unemployment, to make insure competitiveness and growth. Certainly green and quality growth. (2) A clear commitment for the necessary support of this program from our institutional partners. (3) Good management of our debt. More specifically: We are finalizing our Medium Term Fiscal Strategy for the period 2012-2015. This is the first time Greece undertakes such a project which will bring our deficit below 3% in 2014 and at around 1 percentage of GDP in 2015.
"This will allow us to create a primary surplus above 5% from 2014 onwards which will reduce the debt to GDP ratio and make the Greek debt sustainable. Our medium term fiscal strategy will be fully quantified and all the necessary measures will be completely specified."
The Greek premier also noted that a few days ago the Greek Statistics Authority announced that in the first quarter of 2011 Greece’s GDP grew 0.8% on a quarterly basis.
"On an annual basis, the economy contracted -4.8% in the first quarter of 2011, compared to -7,4% in the previous quarter. On Friday, the European Commission predicted that Greece will return to positive growth rates in 2012. Exports are growing fast: 35% average growth in exports per month during fourth quarter of 2010 and the first quarter of 2011. Competitiveness is improving: current account deficit reduced from 14% in 2009 to 11.8% in 2010. Tourism and shipping - two cornerstones of the Greek economy - have posted strong growth this year. Despite higher inflation in other EU countries and high oil prices, we are seeing inflation in Greece being reduced. Slowly but surely," Papandreou indicated, adding:
"These are encouraging signs that the country is emerging from recession - an important glimmer of hope."
Referring to a possible debt restructuring, the Greek prime minister said: " I know that analysts are talking about it and many people have already discounted it. But we - the Greek government, European institutions, the other Eurozone countries all continue to believe that the costs for outway any potential benefits. For our citizens, for the economy, for the Greek and European banking system, for social security funds, for the Eurozone."
"We stick to doing what we need to do anyway: create a primary surplus, get the economy growing again through structure reforms, use our assets to reduce our debt. All other discussions are a distraction and we refuse to be drawn into them," he underlined.
"In the long term, our policies are designed to lay the foundations for a much more dynamic and competitive economy. An economy based on innovation, green growth, and high quality products and services. And finally, how are we going to do this? No one should doubt our commitment and resolve," he added.
On the revenue side, Papandreou said: "A re-evaluation of tax exemptions with a view to keep only those that are socially needed or can be justified for growth and competitiveness. A full-fledged attack on tax evasion, which is an impediment to growth and one of the main causes of social inequality, creating a strong sense of lack of fairness," he noted.
"At the same time we will announce and push forward our next steps in our ambitious privatization and asset management strategy. We have aimed for a target of 50 billion euro in revenues which can cut public debt to up to 20 percentage points. Equally importantly however we will use privatizations to reinvigorate critical sectors of our economy and boost growth. We will frontload this process by announcing the reduction or elimination of the stake which the state owns in listed companies in telecoms, ports, water management, as well as electricity and gaming, bringing forward in time transactions that are mature and will signal the direction which we are taking," the premier added.