“We usually say we are at a turning point. I will say that this year’s Thessaloniki International Fair is held at the point of turning. Because we are exactly at that point where our economy is changing from a negative trend of a seven-year recession to positive growth rates. And today, more than ever, it is necessary to visualize and plan a Greece that will leave behind all the catastrophic mistakes of the past,” Prime Minister Alexis Tsipras said on Saturday in his opening remarks of the inauguration speech of the 81st TIF in Thessaloniki.
In 2008, before the crisis, Greece had a per capita income of 98 pct of the EU average and in five years this fell to 68 pct, a percentage similar with that of Greece compared with European Economic Community countries in 1975. Within this five-year period and the catastrophic choices of New Democracy and Pasok, one fourth of our national wealth was destroyed, available income fell by 40 pct, unemployment soared to 28 pct and poverty widened to 38 pct. Today, with all signs and indexes showing that this cycle is closing, we have to plan the next day, at least for the next five years. In five years we have another great anniversary. It will be 200 years since the Greek Revolution which laid the foundations for the creation of the Greek state, the PM said and asked: what Greece we want for 2021? What is the Greece we want for the 21st century?
I think that only a few will disagree with the goal of a Greece with an established presence in the core of the EU as a really modern, European, democratic state. A Greece as a pole of stability, a beacon of democracy and social justice. A Greece that will have left behind for good the five years of crisis and the mistakes that led to that.
The question, however, is how can we reach this goal? Many will say we can’t reach it unless our partners change their stance. I will not disagree that this is important. But it is not the only thing. In fact, I would turn this logic around. I would say that we can reach this goal only if we change our way of thinking and strategy. If we stop having in our minds only public finances and we turn towards changing the country’s productive model, creating new wealth and changing the way of distributing this wealth, to innovation, research and healthy business activity.
Our country has huge comparative advantages. Beyond the natural environment and tourism, we have a unique geographical positions, making us a hub for trade and energy routes of the future. We have inexhaustible and unused alternative energy sources, we have the ability to produce unique in quality farm products and the most significant but totally unused advantage: exceptional scientific resources, highly-trained young scientists, who can create new wealth through a combination of research, innovation, new technologies and start-up businesses.
We can achieve the goal of a new Greece by 2021 if we join forces to create new wealth and ensured that this wealth will be distributed fairly, not to those who share the benefits of growth before the crisis as lute to make tax-free earnings in foreign banks, or the state-fed oligarchs, with the off shores and the easy money, whose interests are strongly defended by the New Democracy of Mitsotakis. To distribute this wealth to the people of work, creation and production, to the people of science and innovation. This is the Greece we have strengthen. A Greece of social justice, equality, democracy and transparency. This is our strategic goal to become equal among equals in a 21st century Europe. In a Europe where we fight to change its orientation. A Europe where the people will have the biggest say and not technocrats.
The Greek PM said that this transition for Greece and Europe won’t come just like that. It will be a result of a constant fight, daily hard battles which will bear fruit at the end. Tsipras said this fight has already begun offering fruit as the image of Greece was changing. He noted that a 1st Euro-Mediterranean Summit held in Athens offered evidence of this change. Greece is no longer a pariah country, but transforms into a leader of political developments in Europe. With specific interventions to overcome economic and structural inequality between North and South, to put an end to the policy of austerity which leads to poverty and social exclusion and to deal with the challenges of a refugee crisis.
The Greek PM said that this change of the country’s image abroad was not a natural phenomenon or just luck, but the result of specific policy choices and battles. We managed to escape from commitments made by the previous government after long and hard negotiations. We achieved lower budget surplus targets, offering a breathe to the society and the economy. In 2015 we pledged for a budget target of -0.25 pct and we presented a surplus of +0.7 pct and in 2016 we will continue surpassing targets.
The agreement reached with our partners last summer offered a compromise leaving the door open for tomorrow. We stopped economic and social irrationality but the burden falling on the society remains heavy. I fully understand that the tax-paying ability of lower incomes has been exhausted, but today, for the first time since 2009 we can finally have a realistic road map for the recovery of the economy and to lower burdens.
Figures so far show that budget revenue are surpassing targets, putting an end to any talk of possible additional measures. The country’s GDP grew in the second quarter by 0.2 pct compared with the first quarter and all estimates show that we return to positive growth rates in the second half of 2016. The country’s economic sentiment index grew to 92.5 points in August, the best performance in the last 12 months, while tourism sets successive records, with the number of visitors expected to significantly surpass last year’s record of 26.1 million.
That’s why we are at a turning point. There is no room for complacency but we all need to concentrate to move forward, to plan the road ahead step by step. The first step is to positively conclude a second review of the Greek program soon. In the labor relations issue we have a strong ally in negotiations: European laws. We cannot accept anything less than that. Introducing collective bargaining agreements is a fundamental precondition to safeguard workers rights in our country.
The second step is to finalize the measures and ways of debt relief, in continuation of a decision by the Eurogroup.
The third step is to include Greece to European Central Bank’s QE program to reduce borrowing costs, restore liquidity, lifting capital controls and return to capital markets.
The fourth step is to achieve high economic growth rates in 2017 and
the fifth step is a leap to a sustainable growth.
We want to turn recovery to fair growth. This is the big challenge for the government.
A basic condition of fair growth is to move to a extrovert economy, based on supporting labor, innovation, building networks and regulating business environment.
Economic competitiveness is not achieved with cutting payroll cost, on the contrary, raising wages and redistributing incomes is a precondition of growth and not its result.
Innovation, because the country’s real capital are its people. Building networks and supporting social economy. We want modern cooperative formations.
This is the only road to deal with the number one problem of the country: unemployment.
A prolonged recession did not only shrink the country’s GDP but its ability to create income as well. Investments fell by 60 pct. In order to boost investment activity we promote a series of measures and initiatives, using all funding tools to create a Development Fund to fund investment plans, small- and medium-sized enterprises and participating in taking business risks.
We exploit a Juncker package, introducing a new development law and offer a 12-year stable tax environment for large foreign and domestic investments of more than 20 million euros. We also simplify licensing procedures, support healthy businesses and focus on sectors with comparative advantage such as agricultural production, IT and communications, energy, environment, transport, culture and tourism.
We protect and exploit state assets while we fully exploit community funds. But this is not enough so I call all domestic and foreign investors to take advantage of business opportunities and a favorable framework in the country, saying: Invest without any hesitation to Greece. It will be mutually beneficial for you and the economy.
The Greek PM said that after completion of these steps, the country will exit the program at the end of the next two years and reiterated the government goals to cut budget surplus targets to 2.5 pct of GDP in 2019 and 2.0 pct in 2020. Tsipras said the government will achieve to markedly expand the tax base in the next two years by introducing a new legislation on expanding the use of plastic money, based on the standards of all advanced states. The government will also present a law for the voluntary disclosure of income.
The Premier said in two years, the government will have the necessary fiscal space to reduce indirect taxes and to lower taxation on property replacing ENFIA with a new more fair tax. He stressed that the government to implementing fully its commitments made in the 80th TIF last year: protecting home owners, supporting farmers, maintain ADMIE under state control, offering healthcare to 2.5 million people with no social security, preserving main pensions and abolishing a zero deficit clause for supplementary pensions, reforming civil administration, presenting a new regulatory framework for education, taking measures to support new scientists, revising legislation on public works, voted a law on combating tobacco smuggling and fuel smuggling, reviewing tax evasion lists and finally completed a tender for TV licenses in a fully transparent way beneficial for public interests. The 246-mln euros to enter state coffers will be used to cover the needs of social state.
Referring to big infrastructure projects, the Premier said the government managed to change a chaotic situation prevailing in the past and has achieved to restart all big project, to renegotiate contract on road projects saving 765 million euros and to reschedule the monitoring of timetables for these projects. He said that all five road projects will be completed by the end of the first half of 2017. Tsipras also referred to the agreement with Cosco for the port of Piraeus and noted that a project in Helliniko was nearing the point of work beginning. The government also signed an agreement for the 14 regional airports maximizing benefits for the state.
Referring to Thessaloniki, the Greek PM said binding offers for the port were expected by the end of the year, with five candidates expressing interest so far. The government seeks to implement a plan for private investments up to 180 million euros in the port in the period 2017-2021. Another project expected to be completed by 2020 is the Metro, an 1.5 billion euros project.
The Premier ended his speech with a political commitment, offering a breather to hundreds of thousands of small and medium-sized professionals with heavy debts. He announced that all social security debts becoming arrears up to December 31, 2016 will freeze, without write off, allowing professionals to continue working.
The Greek PM said the government’s plan was building wide and stable social alliances in a national effort to find our footing after the country learned its lesson from the past and expressed his optimism that the country will achieve its goals.