Historic decisions for Greece and the Eurozone

Following a marathon negotiating session of European Council on the 26th of October in Brussels, Heads of State and Government of the Eurozone member states agreed on a comprehensive set of measures which reflect their unwavering determinationto overcome together the current difficulties and to take all the necessary steps towards a deeper economic union commensurate with their monetary union.
In particular on Greece, there was an agreement that should secure the decline of the Greek debt to GDP ratio with an objective of reaching 120% by 2020. It also includes a voluntary contribution by private creditors, amounting to a nominal discount of 50% on notional Greek debt. Additionally, a new EU-IMF multiannual programme financing up to € 100 billion will be put in place by the end of the year, accompanied by a strengthening of the mechanisms for the monitoring of reforms implementation.
“The debt is absolutely sustainable now,” Papandreou told a press conference, earlier today, after the meeting of euro zone leaders.
“Greece can now settle its accounts with the past, once and for all. […] We can claim that a new day has come for Greece, and not only for Greece but also for Europe,” the premier added.
Primeminister.gr: Papandreou press conference after the euro summit (in Greek); European Council President: Remarks by Herman Van Rompuy following the meeting of the Euro Summit & Statement by President Barroso
(GREEK NEWS AGENDA)

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PM George Papandreou in “Foreign Policy” Magazine

Prime Minister George Papandreou in an in-depth interview in the American magazine Foreign Policy (July 19) explained the reasons behind the crisis and the measures taken by his government in order to tackle it.

He stressed that with the support of the European Union, Greece decided against defaulting, which would cause insurmountable problems especially for the banking institutions in Greece and Europe alike.

He recognized that there was a lack of transparency; there was a lot of money that was lost, wasted, through a huge bureaucracy and patronage. Nevertheless, he highlighted that “we’re committed to changing the situation.

My government, for example, has now brought in laws such as total transparency in all signatures in the public sector, putting more and more tax reform resources and contracts online.”

The premier empathised with Greeks’ sentiments of unhappiness and pain, but “the wide majority of the people realize that we needed to make changes that were long overdue in our country, such as making governance much more responsible, and running the country much more transparent.”

Finally, he debunked recent media stereotypes of Greeks being lazy and concluded saying that: “we’ve seen in this crisis is that we need more Europe, not less…[ ]

…We need to find global governance and we need to find it based on some common values on which we can agree – democratic values.”

(GREEK NEWS AGENDA)

PM George Papandreou`s interview in “Guardian”

“Greece is on a normalised road,” Prime Minister George Papandreou said in an interview in the UK newspaper The Guardian, noting that in the nine months since his government took office “it has been crisis management, day in, day out,” and stressing that, in politics “you have to make tough decisions.”

In the interview, titled “Reinvigorating Greece is an Olympian task,” concerning the reactions to the austerity measures, the premier admits that “naturally I feel very bad that we had to take these measures and that our financial sovereignty is under the tutelage of the so-called troika (the EU, International Monetary Fund and European Central Bank).”

“It’s not a happy state to be in, and the most painful thing is to take measures against people who were not responsible for the crisis,” Papandreou said. He goes on to explain that the option for the country was to default, or take these measures.

(GREEK NEWS AGENDA)

Deficit down by 46%

According to the preliminary data available for the state budget implementation for the first six months of 2010, on a fiscal basis the deficit presented a 46% year-on-year decline against a targeted 39.5% in the government’s economic policy programme.

The fiscal result of the first six months of 2010 is due to both restriction of expenditures and revenue increases. Nevertheless, these do not yet fully reflect all fiscal measures included in the government’s programme for 2010.

Furthermore, ordinary budget expenditures declined by 12.8% year-on-year against a targeted 5.5% reduction and primary expenditures decreased by 12.7% against a targeted 5.4% annual decrease.

Hellenic Stability & Growth Newsletter: June 2010

(GREEK NEWS AGENDA)

“You in Greece” campaign – Facts about Greece

  Facts about Greece

· Greece is a safe country

Supportive data: According to Legatum Prosperity Index, Greece faces comparatively few security challenges. Domestic security is favorable. Moreover, according to Eurostat, Greece is a country with a relatively low rate of criminality. The feeling of security is well established in society.
· Greece is an attractive destination.
This comes not only due to its physical beauty but mostly due to the “value for money” relationship in the provided services.
Supportive data: According to a poll, conducted in a population of 1200 people,52% of the sample believes that the quality of travel services offered in Greece are of very good standard and 42% believes that the travel services offered in Greece rival those offered in other touristdeveloped tourist markets.

· Greece is a western democracy and the majority of Greek society supports government policy.
Supportive data: A recent research conducted by Kapa Focus research company on behalf of the weekly Newspaper ‘To Vima’, shows that 55,2% of Greeks support the austerity measures imposed by the Greek Government.
·  Demonstrations are strictly local and limited events/occurrences. They take place mostly in the center of Athens, in a specific and controlled area. The mainland regions and the islands of the Greek Archipelago, where the vast majority of tourists go, are not affected at all.
Supportive data: According to Eurostat, Greece is a favourite destination. Especially, in South Aegean and Ionian Islands, it appears that 48.168 stays and 33.304 per 1000 citizens took place, a proof of satisfaction for the Greek touristic product.
· Greece is a tourist country and Greeks know the importance of hospitality.
Supportive data: Zeus, the King of the Greek Gods, according to the Greek Mythology, named as Xenios (the one who offers hospitality) Zeus.
·  The overall number of demonstrations in Greece is lower than the E.U average.
Supportive data:All demonstrations occurred in Athens, in specific and isolated areas. In their vast majority they were peaceful.

· The picture that global media paint is, to say the least, in many cases exaggerating. In many occasions, library images were re-broadcasted as live feeds.
Supportive data: Greece is a pluralist, democratic western European country. Media freedom is protected and encouraged. During the last two weeks Greece hosted more than 300 foreign journalists.
(Greek National Tourism Organisation)

Greece in mourning

(GREEK NEWS AGENDA) Political leaders expressed their shock and grief on Wednesday in the wake of a bank torching in central Athens that left three bank employees dead.

News of the abhorrent attack found Parliament in session to debate the latest round of government-announced austerity measures – the reason unions were holding protests outside the House.

President of the Hellenic Republic

Referring to the current financial situation and the frustration many people are feeling with the political system, President Karolos Papoulias stated the following:
“Our country has reached the edge of the abyss. It is everybody’s responsibility that we do not take the fatal step. Responsibility is proven through action, not in words. History will judge us all.”

Prime Minister

Prime Minister George Papandreou rebuked a murderous attack, while promising that “the perpetrators will be located and will stand trial.” Moreover, the premier called on all Parliament-represented parties to unequivocally condemn the violence.

“Ladies and gentlemen, we are a free and democratic country. We fight, and have fought, for the right to live in a democratic Greece. And each citizen has a right to demonstrate.
But no one has the right to resort to violence, especially violence leading to the murder of fellow citizens. And we know that violence breeds violence. Protest is different from murder.”

Opposition Leaders

Main opposition New Democracy (ND) leader Antonis Samaras stressed that the country is going through “critical moments,” while expressing his grief for the innocent victims of fanaticism, and random violence.
The leaders of the remaining opposition parties – the Communist Party of Greece (KKE) Secretary General Aleka Papariga, Radical Left Coalition (SYRIZA) parliamentary group Chief Alexis Tsipras and Popular Orthodox Rally (LA.OS) leader George Karatzaferis – each condemned the violence and expressed their condolences to the victims’ families.

PM George Papandreou at the White House

Meeting with Obama

Prime Minister George Papandreou met with US President Barack Obama in Washington yesterday.
After the meeting Papandreou said that the US is willing to work with the European Union to regulate the international financial system so speculators cannot target countries with troubled economies.
The premier said  that the issue of speculation will be discussed at the G20 summit in Canada, in June. The two leaders also discussed foreign policy issues such as the Cyprus issue, the integration of Western Balkans into Euro-Atlantic institutions, as well as Greece’s relations with Turkey.

Visa Waiver

Furthermore, the US side announced that Greece will be included in the ‘visa waiver’ programme, thus enabling Greek citizens to travel to the US without a visa.
Papandreou termed the visa waiver “a vote of confidence” to Greece and noted that the Greek government is determined to respond to its obligations and cooperate closely at international level on the tackling of terrorism.

Kathimerini daily: US joins fight against speculators
The White House: Honouring Greek Independence Day (21.35mins)

Papandreou’s Op-ed

In an op-ed published in the International Herald Tribune (IHT), Papandreou notes that the Greek case is not an outlier, but one more flare-up in a broken system of financial regulation and predatory behaviour.
“If global economic growth is to be sustainable, we need better coordination and greater solidarity between nations… We must now establish and enforce clear rules to contain the inordinate power of markets over our national economies and our common currency – not for Greece’s sake, but for Europe’s,” he stresses.
Prime Minister’s website: Meeting with President Barack Obama: Prime Minister’s statement ; Brookings Institution: Prime Minister’s speech & YouTube: PM’s speech at Brookings Institution  
New York Times & International Herald Tribune: Prime Minister’s article “Greece is not an island“; Hellenic Finance Ministry: Newsletter Updating Greek Fiscal Measures  
(GREEK NEWS AGENDA)

Government announced austerity plan

PM: “Sacrifices will Bear Fruits”

The government announced yesterday an additional set of measures bound to slash the double-digit public deficit.
Speaking yesterday at a Cabinet meeting, Prime Minister Papandreou said that the emphasis is now shifting to what the European Union will do. 
The new measures aim at bringing into public coffers some €4.8 billion, amount which corresponds to 2% of the country’s GDP.  

Pay Cuts

In particular, the new measures include a 30% pay cut of public sector’s supplements allocated annually, and a 12% across the board cut of public servants’ benefits. Moreover, subsidies to public entities and their social security funds will be reduced by 10%.
Any additional remuneration in the public sector will be trimmed by 50%, and compensation for overtime work will shrink by 30%.

Executive bonuses in the public sector will be abolished and the Public Investment Budget will be curtailed by 5% (€500 million). As of 2011, the ratio for public sector hirings will be one for every five retirees.

Taxation

VAT is expected to rise at all cases by an average 1% to 2% and an extra levy on fuel, cigarettes, liqueur and luxury products will be imposed.
A one-off tax of 1% on personal incomes above €100.000 will also be introduced, together with a 15% rise in taxation of offshore companies’ real estate property.
Kathimerini daily: Further Cuts and Tax Hikes Announced
(GREEK NEWS AGENDA)

EU backs up Greece

(GREEK NEWS AGENDA) The European Union yesterday, in a joint statement by the Heads of State or Government, agreed to take determined and coordinated action to safeguard financial stability in the euro area, and expressed full support for the efforts of the Greek government and their commitment to do whatever is necessary to get the country’s public finances in order.
European commission chief Jose Manuel Barroso said that the statement was intended to end speculation that Greece would require a bailout package, while adding that “the Greek government believe they do not need financial support.”
Addressing a press conference at the end of the informal summit in Brussels and referring to this agreement to assist Greece, Prime Minister George Papandreou said:

“our partners assessed and ascertained our will to change, we convinced them, following our great efforts, and it is necessary for us to continue. We will succeed.”
Greece is aiming to reduce its deficit by 4 % of GDP this year, largely through cuts in public spending and an increase in taxes. However, Papandreou said that he would not hesitate to adopt more measures if it becomes necessary.
Council of the European Union: Agreement to support Greece; Kathimerini daily: EU offers help but no specific money pledge

PM Papandreou meeting with French President Sarkozy

(GREEK NEWS AGENDA) Prime Minister George Papandreou flew to France yesterday, for talks with French President Nicolas Sarkozy – on an array of issues, focused mostly on economic matters – ahead of today’s European Council meeting.
After his meeting with the French president, Papandreou stated that the Greek government is committed to taking all necessary measures to fix Greece’s public finances.
 “We are ready to take any measures in order to cut public deficit to 8.7% of GDP in 2010 from 12.7% in 2009 and to meet the commitments the government has undertaken in its Stability and Growth Programme.”
Besides the pressing deficit and credit crisis burdening Greece, Papandreou said issues dealing with the Balkans, the Cyprus problem, climate change and even Europe’s position on the international stage were discussed.
Kathimerini daily: Premier talks tough but EU may offer help; Youtube.com: Greek prime minister in France for debt talks

Tax and spending policy

PM: Tackling Economic Woes

(GREEK NEWS AGENDA) Prime Minister George Papandreou chaired a Cabinet meeting that discussed the draft tax bill and public-sector incomes policy.
He said that the government’s efforts to tackle the country’s economic problems will focus on three axes: reducing public debt, promoting growth, and accelerating legislative and institutional measures.
Papandreou stressed that the government’s primary duty was to save the economy, striving for fair solutions that would protect the lower and middle classes as much as possible.

FinMin: New Tax Rates

A range of public spending cuts and tax adjustments were presented by the government yesterday, following an announcement last week by the premier that drastic measures would be taken to prevent Greece from defaulting.
Finance Minister George Papaconstantinou unveiled more specific policies, which included plans to cut the salaries of the premier and his ministers, a moratorium on hiring in the public sector this year – excluding however health services –  as well as changes to the tax system, which will now contain more tax brackets and will lead to higher earners paying more.

The “Economist” Conference

(GREEK NEWS AGENDA) A much timely “Economist” Conference was addressed yesterday by the country’s leadership and experts from the financial and business world.

Taking the floor, Finance Minister George Papaconstantinou availed himself of the opportunity to note that Greece’s fiscal problems are also an issue for the entire eurozone and marked that a spill-over effect will not leave other eurozone countries unaffected, especially those which are as vulnerable as Greece.
The remarks were reported one day before the European Commission announces its recommendations on the country’s stability programme , which is most likely to receive European approval.   

“Deficit Fetishism is a Mistake”
Addressing the Conference (Discussion and Debate with Joseph Stiglitz on the World Economy 2010), Nobel Economics Laureate 2001, former Senior Vice President of the World Bank, and Professor at Columbia University Joseph Stiglitz, dismissed fears that Greece will go bankrupt, adding that, when struggling with recession, governments ought to be careful with their rectifying measures.
“Cutting deficits in the wrong way can be counterproductive.”
Kathimerini daily: Greek woes are a eurozone issue

PM George Papandreou at the World Economic Forum

(GREEK NEWS AGENDA) Speaking as part of a panel – that also included Spanish Prime Minister Jose Luis Zapatero and European Central Bank President Jean-Claude Trichet – at the annual World Economic Forum taking place in Davos, Switzerland (January 27 -31), Prime Minister George Papandreou said that Greece would not leave the euro area and would use the discipline of membership to slash its budget deficit and make long-delayed structural economic reforms. “The answer is very simple. We went [to the market] for borrowing two days ago and we were five times oversubscribed. We’re not looking for money from anywhere else…” said Papandreou. He outlined an ambitious goal to reduce the deficit by four points this year and bring it below 3% by 2012, through measures taken as part of Greece’s Stability and Growth Programme (SGP).  The premier held a meeting with EU Economic and Monetary Affairs Commissioner Joaquin Almunia yesterday, and the discussion focused on Greece’s SGP in light of the report that the European Commission will be submitting on February 3, on Greece.  European Commission President Jose Manuel Barroso – speaking in Brussels on Thursday – stressed the need for the greater coordination of economic policies in the EU, emphasising that economic policies are not only a national issue, but European as well. Referring to Greece specifically, he expressed the conviction that the Greek government must be supported in its effort to fulfil its commitments in the framework of the SGP.  See world reports – BBC.co.uk: Davos 2010: Greece denies a bail-out is needed; Reuters.com: Greece says being targeted as euro zone “weak link”

The Stability Programme was submitted

(GREEK NEWS AGENDA) The cabinet met yesterday  to approve the updated Stability and Growth Programme (SGP) 2008-2011, which was submitted today (15.1) to the European Commission in Brussels.

“We will achieve fiscal consolidation within three years. […] We can do it; this target is feasible,” said Prime Minister George Papandreou.
The premier added that the Stability and Growth Programme does not contain immediate fiscal adjustment measures only, but also a substantial part of the plan for the restructuring of the country.
On his part, Finance Minister George Papaconstantinou stressed that the deficit would definitely be cut, as Greece’s economy is expected to expand in the coming next years.
“The Programme was prepared with the decisive involvement of all ministries and it will be implemented through team-work,” said Papaconstantinou.
Kathimerini Daily: Cabinet stands by recovery plan; Ministry of Economy and Finance: Update of the Hellenic Stability and Growth Programme 2008-2011

ECOFIN: Greek Budgetary Measures Found Satisfactory

(GREEK NEWS AGENDA)  Commenting the results of the July 7th Economic and Financial Meeting in Brussels, Finance Minister Yannis Papathanassiou said that budgetary measures taken by the government in June were considered satisfactory by the European Union.  “We explained the reasons we could not adopt structural measures in 2009. In the 2010 budget, we can pursue structural measures which will help Greece lower its budget deficit”, the minister said.  An extension to the 2010 deadline, if necessary, is possible, the minister added, especially given the increasing number of EU member states entering into excessive deficit procedures.  As of this month, Lithuania, Malta, Poland, Latvia and Rumania have join the list of countries with excessive deficits (France, Greece, Spain, Ireland, UK), while another 9 countries including Italy and Germany are to join the list in November.  Council of the European Union: Main Results of the Economic and Financial Affairs Council meeting  Ministry of Economy and Finance: Tables on the 2009 Budget progress & Press conference on the 2009 Budget execution progress (June 25)

EU Heads in Athens

International Biodiversity Conference

EU Commission President Jose Manuel Barroso was welcomed  in Athens in order to attend a two-day international conference on “Biodiversity Protection Beyond 2010” hosted by Greece (April 27-28). Some 230 representatives of EU member states, NGOs, European enterprises and UN agencies discussed EU policy on biodiversity, as 2010 will be a major milestone for biodiversity policy both in the EU and globally. Addressing the event, Barroso underlined the significance of protecting biodiversity, shifting from “business as usual,” to a new model, hopefully shaped by this new “message emitting from Athens.” 

Prime Minister Kostas Karamanlis praised Greece for its high quality biodiversity amongst Mediterranean and European countries, but stressed that environmental protection ought to know no geographic boundaries. Taking the floor, Environment Commissioner Stavros Dimas warned that the world cannot turn its back on climate change and on any pressing matters of environmental protection. European Commission: Follow the Conference on-line & Dimas on biodiversity

Remarks on Greek Economy

Meeting yesterday with Prime Minister Kostas Karamanlis, Barroso welcomed Greece’s plans to tackle microeconomic imbalances and deliver on structural reforms. The Greek government has pledged to rein in the country’s deficit by 2010 (a fall to less than 3% of GDP), in keeping with EU’s proposed measures on fiscal policy.

Honours Bestowed

European Commission President Jose Manuel Barroso received  (April 27) distinction from the Hellenic Parliament and the City of Athens. Hellenic Parliament Speaker Dimitris Sioufas decorated Barroso with the Gold Medal of the Hellenic Parliament, while Athens Mayor Nikitas Kaklamanis awarded Barroso the Medal of Honour and Benefaction of the City of Athens.

Greece: New Tax Measures

(GREEK NEWS AGENDA)  Economy and Finance Minister Yiannis Papathanassiou unveiled changes in the tax policy yesterday aimed at tackling the international crisis, by increasing budget revenues and providing relief to small businesses, along with initiatives to clean up government finances. The minister said he would reinstate a €10,500 tax-free threshold for the self-employed that had been dropped by his predecessor in August 2008. Taxes on tobacco and alcohol – except wine – will be increased, providing government coffers with an additional €350 million. Other fiscal measures announced include changes to the property tax (ETAK). On the expenditure side, the ministry plans to save about €500 million by diminishing hiring, overtime, and travel expenses. The ministry expects economic growth to slow to an annual pace of 1.2% in 2009, from approximately 3% last year. The European Commission believes Greece’s economy will expand at a rate of just 0.2% this year. Kathimerini daily: Crisis prompts new tax measures Ministry of Economy and Finance: Update of the Hellenic Stability & Growth Programme 2008-2011  (January 2009)

Greece: Measures to Boost Tourism

 (GREEK NEWS AGENDA)   Prime Minister Kostas Karamanlis on Thursday announced a series of 14 measures designed to support Greece’s tourism industry, aimed at helping it cope with the repercussions of the global financial crisis. Tourism accounts for approximately 20% of the economy, and is therefore considered as a vital element in determining Greece’s performance during the global slowdown.  The premier said measures are aimed at promoting Greece abroad, helping tourism businesses cut costs and injecting liquidity into the sector. The plan includes increasing funds spent on promoting Greece as a tourist destination by 50% and tourist enterprises will be benefiting from tax breaks applicable on properties and loans. Steps also include helping companies overcome the credit crunch by providing working capital and finance through the EU National Strategic Reference Framework 2007-2013 (NSRF) funding programme. Athens News Agency: PM announces measures to boost tourism industry; Kathimerini daily: Plan targets vital tourism boost; Ministry of Tourism: Greek National Tourism Organisation; Secretariat General for Information: About Brand Greece, Tourism, Hotel and Resort Infrastructure