PM meets Rehn; return to growth in 2012 predicted

Δημοσίευση 10 Δεκεμβρίου 2010, 08:32 / Ανανεώθηκε 27 Ιουνίου 2013, 14:55
PM meets Rehn; return to growth in 2012 predicted
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Greece will turn the corner in 2011 and return to growth from the second half of 2012, European Commissioner for economic and monetary affairs Olli Rehn said in Athens on Thursday, after meeting Prime Minister George Papandreou.

Greece will turn the corner in 2011 and return to growth from the second half of 2012, European Commissioner for economic and monetary affairs Olli Rehn said in Athens on Thursday, after meeting Prime Minister George Papandreou.

During joint statements after the meeting, Rehn expressed his support for the Greek government's decisions and said that Greece was on the right track in terms of dealing with the deficit but also on issues concerning pension and labour rules.

"Europe stands by you and the Greek people," he added, addressing the prime minister.

The prime minister referred to the important steps already taken by Greece until now and stressed that the target in 2011 was to create the conditions for a return to growth in 2012, not just to reduce the deficit.

A great distance had been travelled over the past year, Papandreou said and this was reflected by the much lower tension and stress during the Commissioner's visit.

"We have waged and are still waging the battle to restore our country's credibility, we convinced [our partners] and a support mechanism was created with Europe reacting positively, while from the start we had stressed that the problem was not just Greek but involved all of Europe and the Eurozone," Papandreou said.

He emphasised the "titanic" effort being made by the Greek people that had resulted in a large reduction of the deficit, greater than all the predictions, and the start of structural reforms.

"Greece has shown courage and determination but we still have a long road ahead," the prime minister added, repeating that Greece would use the breathing space given by the EU support mechanism in order to carry out the changes needed in its state sector and to establish the rule of law and justice.

This effort and the fact that the country was now on the right track was recognised by Europe, which was now considering an extension of the repayment period for the Greek loans, he added.


The prime minister stressed that Greece was actively participa-ting in discussions on the eurozone and the creation of a perma-nent stabilisation mechanism, as well as developmental policy. Pointing out that the same issues had been discussed in his meetings with European Commission President Jose Manuel Barroso and would occupy the summit meeting next week, Papandreou said he had been satisfied with the positions and stance adopted by the European Commission.

"The Greek government and the Commission have almost identi-cal views on these matters, including the proposals for the issue of eurobonds and other equivalent proposals that enhance the position of the euro and the European economy but also those that tend to bring Europe out of the economic recession," he said.

Papandreou again repeated his proposals for greater supervision of markets and the financial system, which he said "lay at the heart of the problem".

The Commissioner, on his part, praised the work done by the Greek government, the results it had achieved and the determina-tion shown by the Greek people, adding that the crisis needed a deeper response from Europe as a whole:

"The current crisis is increasingly systemic and therefore there is a need for a systemic response to it, with both horizontal and vertical measures, so that each country can regulate its own affairs at the same time as strengthening our financial tools," he said.

"We are all in the same boat in Europe," he added, underlining the need to protect the eurozone's economic stability.

During an earlier visit to the Greek Parliament, Rehn met Greek Parliament President Philippos Petsalnikos, who again repeated the need to extend the repayment period for the loans given to Greece under the bailout mechanism.

Petsalnikos called for an EU policy with a "broader horizon for dealing with the problems" and a focus on European unification, while he criticised the objections of German Chancellor Angela Merkel to the issue of Eurobonds as "hasty and not positive".

Rehn: Commission to recommend loan repayment extension

The European Commission will submit in early 2011 a recom-mendation to the Council of Finance Ministers for extension of the repayment period for Greece's 110 billion euro EU-IMF support loan, EU Commissioner for economic and monetary affairs Olli Rehn said on Thursday after a meeting with finance minister George Papaconstantinou in Athens, stressing that Greece is on a good road and regaining its credibility.

Rehn said that the Council of Finance Ministers is prepared to positively examine an extension of the loan repayment. This, he added, should eliminate doubts in the markets as to whether Greece is capable of repaying its loans.

Asked on the prospect of a new loan being extended to Greece after the completion of the three-year program being implemen-ted by the Greek government, Rehn expressed conviction that the three-year program will lead to Greece's return to the interna-tional markets and that, given the extension of the repayment period for the assistance given to the country, a new loan will not be necessary. Asked if the Commission agrees with the measures due to be announced later in the day on streamlining the public utilities and organisations (DEKO), on labor relations and taxation, Rehn replied in the affirmative, noting that the Commission has approved the content of those measures.

He noted, however, that although the first indications from the assessment of Greece are positive, what is needed from this point on is materialisation of the structural reforms.

On the prospective issue of a eurobond to tackle the debt crisis in the EU, Rehn reiterated an older statement that, theoretically, he considers the idea very attractive, adding that the Commission examines every proposal coming from a member state.