Athens.- Prime minister George Papandreou on Friday announced that Greece is formally asking for activation of the EU support mechanism for the Greek economy.
“The time has come for the decision the leaders of the European member countries to support Greece to give us the time that the markets are not giving us. It is a national and pressing need to formally ask of our EU partners the activation of the support mechanism that we jointly created, Papandreou said in a televised statement from the island the southeastern island of Kastelorizo, where he is on a visit.
Papandreou added that he has instructed finance minister George Papaconstantinou to make the necessary actions.
The premier said that the revised figures of the true size of the Greek fiscal deficit for 2009 released on Thursday (by Eurostat) “reminded all of us of the “unfathomable mistakes, omissions and criminal choices and the storm of problems legated to us by the previous government”.
“We all — the present government and the Greek people — inherited a boat ready to sink, a country without prestige and credibility that had lost the respect of even its friends and partners, an economy exposed to the mercy of doubt and the appetites of speculation,” he said.
From the very first day the PASOK government rolled up its sleeves and went to work to reverse this negative climate, set out a plan, took tough measures that many times hurt, but regained the country’s credibility and created new alliances, Papandreou continued.
Greece will not face any problems with its borrowing, Finance Minister George Papaconstantinou said on Friday. Speaking to reporters, a few hours after the Greek government officially asked for the immediate activation of an EU support mechanism, the Greek minister said the need to activate this mechanism was made clear after recent developments, an upwards revision of the country’s fiscal deficit by Eurostat and a downgrade of the Greek economy.
Papaconstantinou said a letter sent to Eurogroup, the European Commission and the European Central Bank was a signal to begin procedures. “We started the procedure,” he said adding that there was no immediate need of borrowing.
Papaconstantinou said he had already contacted with EU Commissioner Olli Rehn, Eurogroup president Jean-Claude Juncker and the vice-president of the European Central Bank, Lucas Papademos (the president Jean-Claude Trichet was in Washington).
The Greek minister stressed that a three-year program will cut the country’s fiscal deficit and will put the country on the road of sustainable growth. The European Commission was already preparing its own report, as well as the European Central Bank. Papakonstantinou will take part in an IMF spring ministerial meeting in Washington.
Samaras opposes activation
Main opposition New Democracy (ND) party leader Antonis Samaras on Friday criticized Prime Minister George Papandreou for his decision to request the activation of the EU/IMF support mechanism.
He underlined that his party will push for solutions and practices that “will end the IMF’s stifling control on the country sooner than anticipated.”
“Greece has the means, the resources and the people to pull itself out of the crisis using its own powers and regain the confidence of the foreign markets as well as its citizens’,” Samaras said, accusing the ruling PASOK party of being solely responsible for the borrowing crisis plaguing the country.
Government reply to Samaras
Replying to main opposition New Democracy leader Antonis Samaras, government spokesman George Petalotis on Friday said the main opposition leader’s statements were a “monument to temerity, mockery of the people and political amnesia”.
“He spoke as if he had never been a minister of the ND governments that led the country to chaos in five years,” Petalotis said.
Greeks remembered ND well as the government that fed a state-sector rampant with wastefulness, corruption, untransparency, scandals and a mass of state hirings along party lines, he added.
The former ruling party had then abandoned the country to its fate, leaving the Greek people with a deficit of 13.6 percent of GDP as a ‘dowry’, Petalotis continued.
“Yesterday’s figures from Eurostat confirmed in the most categoric way the pre-election lies and the blatant deception of the Greek people,” the spokesman stressed.
“The admission of failure was expressed in the most revealing way by Samaras himself, when the spokesman of his party said that the government received from ND ‘a deficit crisis and a debt crisis’. In as far as ND’s proposals for the country’s exit from the crisis were concerned, we are still waiting for them since, up until now, apart from wishful thinking they add nothing specific,” Petalotis noted, calling on ND to admit the extent of its responsibility for the state of country.
Statement by IMF Managing Director Dominique Strauss-Kahn on Greece
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement on Greece:
“We have received Greece’s request for a Stand-By Arrangement. We have been working closely with the Greek authorities for some weeks on technical assistance, and have had a mission on the ground in Athens for a few days working with the authorities and the European Union. We are prepared to move expeditiously on this request.”
IMF experts submit package of recommendations
The International Monetary Fund (IMF) on Friday submitted a package of recommendations to the finance ministry for improvement of Greece’s fiscal management and taxation administration.
The text of the document, submitted by a team of IMF experts jointly visiting Greece with European Commission and European Central Bank (ECB) officials and titled “Basic guidelines and recommendations by the IMF technical assistance for improvement of the fiscal management and taxation administration in Greece”, notes inter alia that the effort for fiscal adjustment focuses mainly on the state budget, but the immense overshooting of expenditures mainly concern the general government (health and social security system).
From the basic guidelines and recommendations of the IMF technical assistance, it arises that immediate actions are needed to regain control of the fiscal finances.
NOT VERY CONCERNED
The Bespoke Investment Group says U.S. investors are not very concerned about Greece. The most recent run-up in default risk “has left the major indices here unfazed.”
In the Washington Times, Mark Jurkevich says because the United States has the largest IMF quota, it is the largest donor country and is thus inappropriately shouldering part of the cost of the Greek bailout.