The Greek prime minister said that the terms of the new loans will essentially be based on the policies and measures outlined in the Medium-Term Fiscal Strategy. He targets such as reducing the deficit to 1 percent of GDP by the end of 2014, cutting spending by 28 billion euro and the creation of primary surpluses were unchanged. "I gave assurances that all sides in Greece are aware how critical the situation is," Papandreou stressed, noting that several "dangerous scenarios" about Greece were currently in circulation.
"Our goal is to avoid default. We are doing everything we can to put our house in order. I believe that maturity will prevail among MPs also," he added, noting that Greece's EU partners had given their support because they recognised the sacrifices and efforts made by the Greek people.
The Greek prime minister underlined that Greeks could be proud of the course the country had followed in the last 20 months and for having avoided bankruptcy: "If we had defaulted, the national health system would have shut down, pensions would have been reduced by 80 percent or cut entirely. We managed to stay standing and will continue on this course," he said.
Greek politicians had for decades refused to take on the political cost of making changes, Papandreou pointed out and this was one reason why he had tried to achieve a broader consensus, while adding that he was determined not to back down.
The prime minister insisted that Greece was now seen as reliable by its EU partners and this had allowed it to negotiate a lower interest rate and extension of repayments.
Concerning the new economic programme, Papandreou stressed that this needed to also address growth prospects and might include bilateral investments. He said this had been an issue discussed during meetings held before the EU leaders' summit. As an example, he cited a proposal put forward by Germany's finance minister Wolfgang Schauble for exports of solar energy.
Another aspect he touched on were policies to promote social cohesion, with assistance for those that needed it. Papandreou clarified that this would not affect the programme targets but could involved supplementary policies and, chiefly, a reform of Greece's faulty taxation system so as to widen the taxation base and ensure that taxes were chiefly paid by the rich. This, especially, was an area that needed the consensus from main opposition New Democracy, he pointed out.
Papandreou insisted that if the austerity measures were implemented conscientiously and quickly, not only would further measures be avoided but they might even be made lighter.
"We are not asking our EU partners for money in order to stay the same but so that we can change. With this money, they will help both Greece and the Eurozone. They will help create a strong Greece in a sensitive region," he told reporters.
"Changes are needed that are deep and lasting. There is resistance to these. This why I have spoken about holding referendums - the voice of the Greek people will play a role. We must not be afraid of referendums," he stressed.
Below is the extensive reference on Greece contained in the draft statement of conclusions:
"As regards Greece, the European Council recognises the considerable progress achieved over the last year, particularly in the area of fiscal consolidation. It welcomes the Greek government's continued strong commitment to implement the adjustment programme.
The European Council calls on the national authorities to continue implementing with resolve the necessary adjustment efforts to put the country on a sustainable path. A comprehensive reform package agreed upon with the Commission, in liaison with the ECB (European Central Bank), and the IMF (International Monetary Fund), and adoption by the Greek Parliament of the key laws on the fiscal strategy and privatization must be finalized as a matter of urgency in the coming days. Following the request by the Greek government announced by the Greek Prime Minister, this will provide the basis for setting up the main parameters of a new programme jointly supported by its euro area partners and the IMF, in line with current practices, and at the same time for allowing disbursement in time to meet Greece's financing needs in July.
The euro area Heads of State or Government agree that required additional funding will be financed through both official and private sources. They endorse the approach decided by the Eurogroup on 20 June as regards the pursuit of voluntary private sector involvement in the form of informal and voluntary roll-overs of existing Greek debt at maturity for a substantial reduction of the required year-by-year funding within the programme while avoiding a selective default.
The euro area Heads of State or Government call on Finance Ministers to complete work on outstanding elements to allow the necessary decisions to be taken by early July.
The European Council calls on all political parties in Greece to support the programme's main objectives and key policy measures to ensure a rigorous and expeditious implementation. Given the length, magnitude and nature of required reforms in Greece, national unity is a prerequisite for success.
The European Council welcomes the Commission's intention to enhance the synergies between the loan programme and the EU funds. The European Council supports all efforts to increase Greece's capacity to absorb EU funds in order to stimulate growth and employment. This can be done by refocusing them on improving competitiveness and employment creation. Moreover, the European Council welcomes and supports the preparation by the Commission, together with the Member States, of a comprehensive programme of technical assistance to Greece.
Heads of State or Government are conscious of the efforts that the adjustment measures entail for the Greek citizens, and are convinced that these sacrifices are indispensable for the economic recovery and will contribute to the future stability and welfare of the country."