Greek PM Samaras: Eurozone exit avoided. He promised the latest wage cuts to be the last.
Thessaloniki.- Hopes for keeping Greece in the Eurozone gained a new momentum, following information published in a German magazine that German Chancellor Angela Merkel had reached the view that Greece must not be allowed to leave the euro zone in the autumn. der Spiegel magazine wrote on Saturday that Chancellor Merkel is prepared to grant Athens more flexibility over its bailout payments.
Greece has made scant progress on the economic reforms it has promised its international lenders in return for more cash. But Merkel sees the necessity of avoiding a third aid program for Athens given the difficulty of getting it passed in the German parliament amid growing bailout fatigue, der Spiegel said, without naming its sources.
It cited the chancellor as telling her inner circle: “We must find a solution”.
That would involve re-organizing the current aid package, for example by increasing upcoming tranches in return for reducing later ones, it said.
Greece’s ‘troika’ of international lenders will probably not take a decision on the country’s future until early November as their report will take longer than expected to deliver, the magazine cited diplomatic sources as saying.
The lenders from the EU, ECB and International Monetary Fund will return to Greece in early September to review progress in reforms and decide on potential adjustments to the bailout agreement and it would take a few weeks before their report is ready, the EU executive said late last month.
Prime Minister Antonis Samaras appeared satisfied after his two-hour meeting with European Council president Herman Van Rompuy in Athens on Friday afternoon, which reportedly took place in a very good climate.
The prime minister outlined the significant and laborious efforts, as he said, made by the country to regain credibility, placing particular emphasis on sacrifices made by the Greek people and the recovery of the economy.
Samaras repeated that the sacrifices of the Greek people have reached their limits, and must pay off. He also outlined to Van Rompuy the plans for privatisations and the government’s initiatives to combat the effects of the recession and to combat unemployment, while calling for Europe’s assistance to combat the scourge of illegal immigration.
On his part, Van Rompuy sent a clear message that he has no doubt that the future of Greece is in the eurozone, while at the same time repeating that commitments undertaken by Athens must be met.
The European Council president also expressed a conviction that the present economic adjustment programme in the country will create a more competitive economy, while explicitly saying that the crisis “is not only a Greek crisis”.
On Sunday afternoon, Prime Minister Samaras was expected to meet with the leaders of the political parties backing the government, PASOK’s Evangelos Venizelos and Democratic Left’s (DIM.AR) Fotis Kouvelis.
At 11a.m. on Monday, the prime minister will receive Canadian Senate Speaker Noel Kinsella at the Maximos Mansion government headquarters, before receiving representatives of the EC-ECB-IMF ‘troika’.
On Tuesday, he will travel to Frankfurt for an early afternoon meeting with European Central Bank (ECB) President Mario Draghi.
Prime Minister Antonis Samaras on Saturday reiterated that Greece will overcome the current and deep economic crisis that it is facing, emphasising that unity will ensure that the international climate vis-a-vis the country will “continue to move in our favour”.
Samaras spoke from Thesssaloniki, where he began a half-day visit to inaugurate the annual trade fair in the northern city — the largest in Greece — but symbolically breaking from a past tradition by not addressing local business and political leaders and returning to Athens the same day. Samaras also canceled the customary, and usually nationally televised press conference, that Greek premiers gave on the first Sunday of the Thessaloniki International Fair (TIF).
“The only thing I ask of you is to believe in yourselves; for the entire Greek people to believe in their strength,” he said, stressing that the “Cassandras” of Greece’s eurozone exit are proving wrong.
“The profiteers of destruction bet on our failure, we won’t do them the favour … The next six months, until the end of October, will determine many things, and it’s up to us to succeed … If we remain united in two years the situation will be much different from the one today. Not all the problems will have been solved, but the light at the end of the tunnel will be clearly seen,” he said.
Samaras, who heads a coalition government dominated by his New Democracy party but is also backed by rival PASOK and the smaller Democratic Left party, said the most prominent achievement of his government since the June 17 election has been to keep Greece firmly in the eurozone.
“We promised a re-negotiation and are already improving the country’s negotiating position, which is a condition for whatever improvement, with (other governments) already starting to listen to us. We promised to make recovery a priority, and that’s what we’ve done. We promised to deal with illegal immigration and crime, and in a matter of weeks we did things that had not occurred in years,” he added.
Samaras cited what he called “three truths” in statements immediately after inaugurating the 77th TIF, firstly, that Greece was eerily close to exiting the eurozone — popularised as “Grexit” by international media and analysts.
“The out-of-Greece ‘drachma lobby’ appeared, momentarily, to have gained the upper hand. Greece would have died (in such a case) and would have suffered more with such a ‘death’ than any other country in world has suffered in peace time,” he said.
A “second truth”, according to the Greek prime minister, was the necessity to restore the Greek government’s credibility in order to preclude any economic catastrophe. “We had to proceed rapidly and implement our commitments … Thirdly, a reduction of spending had to implemented anyway.”
Amid the pending finalisation of a latest package of austerity measures, budgeted at no less than 11.5 billion euros, Samaras repeated that the “these (measures) will be the last”.
The latest austerity measures, widely expected to cut salary scales in the wider public sector and pensions, have expectedly generated heated opposition, especially amongst specialised professional clusters, such as law enforcement, the judiciary, medical staff at public facilities and educators.
“We are trying to avoid horizontal cuts, because they are unfair; above all, we are trying to make them (salary cuts) temporary. When the economy rebounds, these harsh cutbacks will slowly begin to be restored. I cannot tell you which ones, when and to what extent they’ll be restored, but I can tell you that when the country again returns to growth, when we escape from deficits, we will start from those that have been the most unfairly dealt with: the low-income pensioners, those with large families, those in the middle class that are the most sorely tested, and those in uniform,” he underlined.