Athens News Agency: News in English, 09-06-03

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] PM stresses 'reforms, responsible leadership'

[02] NBG head: Crisis ending

[03] State aid for enterprises

[01] PM stresses 'reforms, responsible leadership'

He also emphasised that the goal is to prepare the country to meet the challenges in the wake of the crisis' end, stressing that most of the reforms have already been set in motion and what is needed is continuity, consistency and greater intensity, so that they will move ahead at a faster pace.

The prime minister spoke at length on his government's reforms, Sunday's European Parliament elections, and also on foreign policy issues, with the focus on Turkey and its EU aspirations.

Asked to what degree the outcome of Sunday's European Parliament elections will influence the further course of the government's work and whether it would determine the agenda for the 'day after', the premier noted that the Euro-elections "are a very serious thing, first of all because the European Parliament has much greater importance today than in the past as serious decisions are taken there and, particularly for a country that wants to be on the front line of Europe, its presence in the European Parliament is also of very great importance.

"Naturally, the Euro-elections also have a political significance; useful conclusions arise, but beyond that, the agenda of the 'day before' is a given fact. And this agenda is the path of responsibility, the path of reforms, all that which we must complete, and are completing, to limit the repercussions of the major international crisis and to prepare the country to face the 'day after' under much better terms," he explained.

Asked what he considered as the priorities immediately after the Euro-elections, given the international economic situation and the European Commission's remarks regarding the Greek economy, the prime minister replied that Greece, up until now, has been more mildly affected by the "real crisis", in other words, the impact on the real economy.

"This is the truth. Of course, we have experienced negative effects and naturally the forecasts for all of Europe, as for the entire world, are adverse, but comparatively, however, with other countries, we do not have such major difficulties," he noted.

"In Greece, in our country just as in every country, there are particularities. The significant problem is the immense public debt accrued over the past decades, which requires that we are always cautious in our fiscal matters, along with some dysfunctions in our markets. In other words, there is a need for structural changes," the premier said.

"This means, therefore, that we must have our attention turned to pushing the reforms ahead, not only because Europe tells us so, but because we need to understand ourselves what we must do. At this time, however, when the crisis is showcasing the weaknesses of every country, we are obliged to be honest, to look at those weaknesses in the eye and to immediately advance reforms".

Asked to outline the reforms planned until the end of the year, Karamanlis first of all noted that "most of them have already been set in motion".

"One example, a few days ago the government announced the merger of 255 agencies of the wider public sector ... This is an important step in the effort, in the constant effort, to tidy up the wider public sector. We all know that it is the 'sick man' in our economy."

Another example he cited is the restructuring and streamlining plan for Hellenic Rail (OSE), which Karamanlis said costs the national economy more than two million euros a day.

Thirdly, he continued, is a need to advance the government's plans with great caution, ones for curbing expenditures in the health sector.

"A cutback of expenditures is necessary, but not at the expense of services provided. However, the fact that now there is a central committee that approves supply contracts; the fact that all of the hospitals are now obliged to submit an annual budget, a balance sheet; the fact that we now have a clear plan for limiting exorbitant expenditures for pharmaceuticals, indicates that we must persist and continue on the path that we have embarked on."

Fourthly, the premier noted the substantial social security reforms carried out last year.

"The fact that 133 social security funds were decreased (through mergers) to 13 (larger funds) was a very big step, but more is needed. Let me give you a few simple examples: Separating the health branch from the pension branch; rationalisation of the 'heavy and hazardous' professions, which is overwhelmingly larger in our country than in the other European countries. And on the other hand, promoting the 'opening' of the closed markets and professions. Naturally, this is done through dialogue with the interested sides, but with a clear target: a more open economy that will be more competitive and more productive.

"What does all this mean? It means that we can turn the crisis, the major challenge of the crisis, into a national opportunity, provided of course that we have the political courage to take the decisions that are necessary, decisions which sometimes may also create dissatisfaction. They may cause a temporary or short-term political cost, but they are nevertheless necessary for Greece's course," Karamanlis said.

Asked to comment on opposition reactions to the reforms, the premier said: "It is a fact that all the reform efforts -- let me remind you of two of the top reforms, educational reform and social security reform -- were sharply contested by the opposition parties, and chiefly the main opposition party's (PASOK) fierce reaction, with unproductive and barren criticism, and with a monotonous 'no to everything'. This is a disadvantage for the country. And I wish to be clear on that, because there are countries, for example, where the social security reform -- which perhaps was even more advanced than ours -- was agreed upon by political and social partners.

"Also, as you know, a few months ago, when the international crisis was at its peak, I asked the leaders of the other parties, if not to agree, to at least reach an understanding on some basic guidelines, namely, on what I would call the fundamental and self-evident aspects. I was again met with refusal, mainly from the main opposition. At any rate, this does not mean that we must not push forward. In the end, it is the government that has the responsibility. I have been elected twice as prime minister by the Greek citizens. It is my duty to do that which must be done. That is what we are doing, and that is what we will continue to do," the prime minister said.

Asked about issues faced by ethnic Greeks abroad, Karamanlis first noted that he and everyone in Greece has a special place in their hearts for their compatriots living and working outside the country.

"They are a valuable part of Hellenism that contributes a great in all aspects, because they are good ambassadors of our country abroad and because they contribute much, especially to the efforts on our national issues.

"I must say that, every day we can do more for these people. Much has been done. We are in close contact with the upgraded World Council of Hellenes Abroad (SAE); much has been done to improve teaching of our language, in cultural affairs, so as to enhance the ties between the homeland and the Greeks abroad. I regret that a very large reform -- and also a very major step that would have rendered our bonds with our compatriots abroad even closer -- did not become a reality, due to the barren refusal of the opposition, and especially the main opposition party, namely, to agreeing that we all pass a bill giving an absentee vote to the Greeks abroad," he added.

"I say this because the nation is also comprised of the Greeks abroad as well, and beyond that, I believe that the strongest bridge, even closer ties and communication between the motherland and its children abroad, would have been their direct participation in our country's political and social affairs. The bill, which the Greeks abroad organisations were in agreement with, was tabled in Parliament, but unfortunately, only ND voted in favour of it, and given that the Constitution requires a 2/3 (two-thirds) majority, it was not passed. I hope that in the not-so-distant future we will be able to make this a reality, because our compatriots abroad deserve it," the premier said.

Foreign affairs

Turning to foreign affairs, the prime minister was asked to elaborate on Greece's steadfast position concerning Turkey's aspirations for European Union membership, especially the position that full accession presupposes Ankara's full compliance with the European principles and values. He was also asked whether this included a solution to the Cyprus problem based on the European acquis and withdrawal of Turkish occupation forces from Cyprus, which is an EU member-state.

"Our strategy on this issue is quite clear and simple, and I also believe that it is very concrete: Full compliance, full accession. What does this mean? I believe that we all agree that a European Turkey, a Turkey that has adopted attitudes and behaviours founded on European criteria, principles and values, will be a better Turkey, first of all for its own citizens, but also for its adjacent region and for all of Europe and, of course, its neighbours. This strategy means that Turkey has, and should have, a European potential, provided however that it, just as every other candidate-country, absolutely fulfils all the criteria," Karamanlis explained.

"This is our position, and I believe it is a very strong position. This means that gradually, Turkey is required to fully respect the European acquis. And this includes the issues you mentioned because, naturally, one cannot possibly speak of a European future when one country (candidate Turkey) does not recognise a country that is already an EU member-state, and indeed, a country whose consensus is needed (for Turkey) to continue on towards the next steps on the European course," the premier said.

"Beyond that, however, it also means many more things. It means that a 'casus belli' cannot exist; it means that there must be absolute respect for the rights and freedoms of the Ecumenical Patriarchate. It also means that the principles of good neighbourliness must be fully consolidated. And what is surmised by all this? That this strategy has a beginning, and an end. We maintain this reasoning. It is up to Turkey to prove, in practice, that it wants and can become a European country tomorrow, in the future," Karamanlis continued.

Turning to the fYRoM "name issue", the prime minister was asked whether his government would seek a more substantive European intervention for a solution to the nagging problem, given that despite statements by the new president of the neighbouring country, Skopje continues to maintain the same stance it has held in the past.

"But Europe, and also the Euro-Atlantic Alliance (NATO), of course, already has a clear-cut position, crystal clear decisions, and unanimous decisions on this matter, and I must note that I consider this an important national success, if one considers where we were on this issue three, five, 10 years ago. The decision today is that the criterion and condition for fYRoM's accession course to both these major institutions -- the European family and the Alliance -- to progress, good-neighbour relations must be secured and the outstanding name issue must be resolved with a mutually acceptable name," the premier explained.

"Our position is clear on this, clear and steadfast. Besides, everyone knows this now, and that is how we reached the two, in my opinion correct, decisions in Bucharest (NATO summit) and later at the European Union. A mutually acceptable name, a composite name with a geographical determinant that will make clear the distinction from Greek Macedonia and will be in effect universally, for all uses. We desire good relations with that country. We want to support its choices for (membership in) Europe and the Alliance, but that is the prerequisite, and it is an inviolable condition," Karamanlis continued.

Asked, finally, what was at stake in Sunday's Euro-elections, Karamanlis noted that "I spoke about the content of the Euro-elections at the beginning of our interview, and I would add that what is at stake for the country today is whether we will choose to support and actively advance the path, the choice, of responsibility, which may entail tough decisions at times, but which is the only road if we want our country to maintain its 'weapons', its strong points, and to permanently cure its weak sides...in other words the path of reforms, or whether we will listen to the street sirens, the voices of irresponsibility and populism".

"I believe that the choice is clear. For the government and for myself, personally, there is no quandary, nor has there ever been one, on what we must do. This is what we are doing, and what we will continue to do the 'day after'," the premier stressed, adding: "I am certain that the Greek citizens realise this very well and, regardless of any other parameters and particularities the Euro parliament elections may have, they know that this is a path that we must all traverse together."

[02] NBG head: Crisis ending

Arapoglou, addressing an annual regular general shareholders' meeting, said banks were now able to be in a position to support real economies at the time it was most needed.

"We expect that recent few signs of stabilization in the global economy would multiply in the second half of 2009 preparing a slow but steady recovery in 2010. We must not be complacent, however," he added.

Commenting on the Greek banking system, the Greek banker said it was widely acknowledged that it was healthy, with adequate capital and liquidity to deal with the consequences of the economic recession in the country and in Southeast European countries.

Greek banks have never posted negative results, they cannot be blamed for irresponsibility or lack of transparency while they continue to be profitable despite the crisis, he noted. Arapoglou said a state-sponsored programme to boost liquidity in the Greek economy offered the necessary support to the domestic banking system.

National Bank is capable of exiting the current turmoil in the global financial system unscathed and to maintain its high returns to shareholders, allowing it to continue its independent, autonomous growth and taking advantage of major opportunities created in foreign countries of strategic interest for the bank, Arapoglou told shareholders.

He stressed that National Bank's lending to small- and medium-sized enterprises totaled 1.3 billion euros in the first quarter of 2009.

[03] State aid for enterprises

The measure allows national authorities to grant aid in the form of reduced interest rates on loans concluded by 31 December 2010. The scheme meets the conditions of the Commission�s Temporary Framework for state aid measures, which gives Member States additional scope to facilitate access to financing in the present economic and financial crisis. In particular, it is limited in time and only applies to companies that were not in difficulties before 1 July 2008. The scheme is therefore compatible with Article 87(3)(b) of the EC Treaty, which permits aid to remedy a serious disturbance in the economy of a Member State.

Competition Commissioner Neelie Kroes said "The Greek measure aims at improving the liquidity of companies affected by the current economic downturn, without causing undue distortions of competition. A significant reduction in the cost of loans can be an effective way of encouraging business investment and economic recovery."

The Greek authorities designed this measure in accordance with the rules set out in the Commission's Temporary state aid Framework. The scheme is limited in time and only applies to companies that were not in difficulties before 1 July 2008. It is part of a wider set of measures that Greece is putting in place under the Temporary Framework.

Greek Economy and Finance Minister, Yiannis Papathanasiou, welcomed the decision saying it ensured that in a crucial period, the survival and continuing of operations of thousands of enterprises, along with employment and workers� incomes.

CAPTION: File photo of Greek Economy and Finance Minister Yiannis Papathanasiou.

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