Brussels (ANA-MPA – M. Spinthourakis) – The world was facing a complex economic crisis of “unprecedented” dimensions, one which demanded that countries cooperate and remain alert in order to respond to it, Greek Prime Minister Costas Karamanlis said during a press conference here on Friday, after a meeting of European leaders. For Greece, in particular, he stressed that the country had to avoid further increasing its already high public debt and fiscal deficit.
“The situation is difficult and it is our choice to tell the citizens the truth. Others may have chosen the easy path and hide the truth from citizens, but this is damaging for the country,” he told reporters.
He said the Greek government’s policies sought to achieve three parallel goals, with actions that sought to boost the real economy while preserving fiscal balance and supporting those having the greatest need. The premier stressed that none of these could be focused on at the expense of the others.
Specifically for the Greek economy, Karamanlis underlined the problems caused by the country’s high public debt and defended austere measures to increase revenues and curb public spending announced earlier in the week, stressing that these “were emergency measures responding to special circumstances” and adopted with “consideration for social justice, based on which the most wealthy Greeks will contribute more to the recovery of the Greek economy”.
“It is not the government’s job to be pleasant and its actions are motivated by a sense of responsibility,” he underlined, referring to efforts to prevent tax evasion and improve tax-collection mechanisms.
Replying to a suggestion that the government also increase taxation on banks, Karamanlis said that this would be a mistake in the midst of the crisis, since it would further restrict the flow of credit to the economy.
The prime minister ruled out another financial audit for the Greek state but stressed the need to carefully monitor economic indicators, noting that this was not demanded by Brussels but a duty and responsibility of the government.
“When we have a problem we must fix it ourselves and no one can tell us how this must be done,” he underlined.
Karamanlis pointed out that the public debt had been reduced in recent years relative to the Gross National Product (GNP), adding that he had decided against “shock therapy” to reduce this further. He forecast, also, that Greece would be one of the few EU countries with positive growth in 2009, and that “the country will not enter a period of economic recession”.
At the same time, given Greece’s long-term tendency toward fiscal imbalance, the drastic measures announced in the past week aimed to tidy up public finances and were taken alongside other measures designed to increase employment and promote growth, as well as measures to support the tourism sector, the prime minister said.
In response to other questions, Karamanlis denied the existence of a plan to bail out Eurozone countries that could not meet their borrowing needs and stressed that, even if such a plan existed, it would not concern Greece. He underlined that the refinancing of Greece’s public debt was being carried out in a normal way and that the country had no problem covering its borrowing requirements.
Questioned about solidarity between EU countries, the prime minister said there was no need for solidarity to address fiscal deficit problems in the Eurozone and stressed that each member-state had to implement its own programme of fiscal consolidation.
On employment policy, Karamanlis said that he was in favour of steady jobs but that it was logical to seek solutions of necessity during times of crisis. The Greek government was prepared to discuss the issue of part-time employment, on condition that this would be temporary and decided after consultation with the social partners, he added.
Asked to comment on the stance of the opposition parties, Karamanlis claimed that he had asked for a “realistic discussion” leading to an agreement on six “ground rules” that he termed “self-evident”. He listed these as preserving the European framework, restricting further growth of Greece’s large public debt, gradual adjustment to reduce the public deficit, establishing the ‘limits’ of the Greek economy, as well as agreeing on the need to support lower income groups and that self-restraint in a time of crisis was beneficial for all society.
There had been no response, he said, adding that the “government will do its duty”.
Outlining the results of the EU summit, Karamanlis said that ways of coping with the crisis and coordinating the actions of EU member-states had dominated the meeting. He pointed out that national governments and international organisations throughout the world had taken action since September 2008, intervening to deal with the repercussions of the crisis.
Listing the problems, Karamanlis said the most important were the reduction of lending by commercial banks to households and businesses, an increase in state borrowing throughout the world and trends toward protectionism.
The Greek prime minister also focused on the need to reform the framework for monitoring the international financial sector in the medium term:
“Every financial organisation must be constantly checked and monitored to ensure stability,” Karamanlis said, adding that the main guidelines emerging from Friday’s European summit had been those of intensifying efforts for the recovery of the real economy and faster action to improve supervision of all financial institutions within the EU.
Karamanlis welcomed a decision by European leaders to provide five billion euros in European funds for energy-related projects to develop infrastructure in rural areas. He said that this package was “of particular interest to Greece” since it would provide funding for three energy-related projects that directly concerned the country and for boosting agricultural development.
Emphasising the human side of the crisis, the Greek premier underlined the need for greater protection for households and businesses, particularly the weaker and more vulnerable sections of society, such as the elderly, young people and the unemployed.
“As in all economic crises, there is a need for international coordination,” he pointed out, emphasising the special role of the EU in this direction.
Main opposition PASOK party leader George Papandreou on Friday chaired a meeting of top PASOK cadres overseeing the party’s economic policy sectors, where the former charged that the greatest crisis today is the country’s lack of governance.
“With great concern we heard the prime minister today looking for an alibi instead of asking for forgiveness for real problems,” he said, charging that Greek Premier Costas Karamanlis is systematically distorting the truth and of unreliability.
He also said that seriousness and responsibility needed to combat the international economic crisis is lacking from today’s government.
Moreover, in commenting on EU-wide policy, Papandreou, the foreign minister in previous PASOK governments, chided what he called the “conservative majority in Europe,” saying it was unable to rise to the circumstances which the current crisis entails.
KKE (Communist Party of Greece) commented that disobedience to the EU constitutes a basic condition for the people to repel the worst anti-popular measures.
SYN (Coalition of the Left) argued that the PM accepted the European leaders’ choices without any reaction.
LAOS (Popular Orthodox Rally) reported that Mr Karamanlis went to Brussels begging for credit of time.