Today, we discussed at length the developments in our two countries, as well as, the developments in the European Union. In Greece, our tri-party government, elected just 11 months ago, had to fight hard to restore our country’s credibility.
In a very short time, we had to correct accumulated mistakes and failures of the previous decades, in a very poisonous environment, dominated for instance by rumors about the potential Grexit.
With hard work we progressed on the painful but necessary path towards fiscal consolidation. We are now meeting our targets month after month.
I presented to the Prime Minister the track record of Greece, which between 2010-2012 reduced its primary deficit by 9,5% of GDP, which is the fastest ever for an OECD country!
We are accelerating the necessary reforms to restore competitiveness and have succeeded to put the privatization program back on track. We are taking concrete steps to make Greece a business friendly country again, eliminate red tape, bring back a red carpet treatment for an investor, help the SMEs (small and medium enterprises), as the Prime Minister says, which is very important, in order to foster growth and combat unemployment, which is really the worst syndrome of what is happening today in many countries, especially in Southern Europe. We have to open up close professions, liberalize the markets, which is also very important.
We have, in many ways, in the series of those efforts, succeeded! Now the rating agencies upgrade Greece and nobody is discussing anymore about the Grexit! And I’m very thankful that everybody is discussing about “Greekcovery”.
We are not out of the crisis yet. As I explained to Jyrki, we have covered 2/3 of the required fiscal adjustment. But this came with an unprecedented social cost, which is the unemployment. The unemployment level has reached 27% in Greece. This is creating a high risk for the social cohesion of our country. It is especially felt in the worst way by the youth, which is suffering the most. Still the Greek people have endured all these hardships with patience and dignity.
The current discussion that we are having on Greece, and you mentioned specific ways to overcome this problem, is very important. We are facing new potential initiatives for fighting the youth Unemployment. And these initiatives should be encouraged and intensified. I’m very happy we have agreed on this.
We also exchanged views on the current developments in the European Union and the Eurozone, in light of the forthcoming EU Summit on the 27th of June and the Greek Presidency of the EU, the first half of 2014.
We both agreed on the need to enhance the competitiveness of our common market.
And I want to stress the need for a long term strategy for competitiveness, for Europe as a whole, including a comprehensive energy package. We need to diversify our suppliers. But most importantly, we need to develop our own resources and reduce our dependence on foreign energy supplies. Greece can contribute significantly to that. And Europe is currently moving to a more comprehensive energy policy.
Today I am happy to be among good friends! And I would like to thank the Finnish people for having been so positive and good and understanding towards the Greek problem.
Ακολουθούν οι ερωτήσεις των δημοσιογράφων:
Question: It seems that IMF’s most recent report acknowledges the mistakes committed by the initial Program to Greece. How would you comment on that?
Answer: Reading through this very recent report you will probably remember that I was emphasizing and in fact criticizing these (what the IMF itself calls as) mistakes right from the beginning. And we have been correcting those mistakes during the last year.
You see, you need a politician, not only to criticize others, but to act as well!
The job of a politician is not only to talk about the wrongdoings of others, but to correct them too! This is exactly what we have been doing in the last year.
In the same report it is underlined that now the current Program is progressing on the right track, emphasizing on structural reforms and privatization projects, on top of fiscal adjustment.
What is of paramount importance today for us is to accomplish all our targets to the end and get it over with. Get out of the crisis as soon as possible.
This will certainly be a success for Greece.
But it will also be a success for Europe as well.
When we finish the job, we will be able to review the whole process, appreciate its strong and weak points.
But now, only one thing matters: Achieve our targets and get it over with.
Nothing should distract us from that.
I’m not being an optimist, I’m being a pragmatist. I’m an optimist who is walking and feeling the ground. I’m not a theoretician. So, with things that have already happened in Greece and the way things are moving, Jyrki talked about summertime, when we do expect a lot of tourists to come.
At the same time our economy is being recapitalized through the banks. We are paying our arrears back to the people. Structural funds are going to help. Investment is coming over. And, so I think, that these are the positive signs.
Question: Finland is well known world-wide for its achievements in technology and innovation. Could Greece follow the same model?
Answer: Finland is a country about the same order of magnitude as Greece, although it is located in the European North, whereas Greece is positioned in the European South. Finland also went through a fiscal crisis 20 years ago. I learned many things talking to Jyrki just before. But this is old history now. Today Finland enjoys a “triple A”, in other words a top-notch financial credibility!
Finland is now – and has been for years – an example of competitive growth. This shows that a country can really transform from a short term ordeal that it had to go through in the ‘90’s, into a real opportunity to reshape its future. Finland succeeded in that. And we can succeed as well!
Of course, we are not identical countries. But there is a common principle for both of us: Competitiveness and extroversion!
Another think we can learn from Finland is to attribute great emphasis to the “human capital”; to educate talented people. And make sure that these people are makers and players in the economy. The role of public education in Finland is being a real model and a world leader on this.
So, there are many things we can emulate and there are many things we can talk about for the future. But the real word that counts is competitiveness!
Question #1: In Finland, the Finance Minister and, also, the top official of the ministry said this week that Finland will not give up on the so – called “collateral agreement”. Even if this would mean blocking the restructuring for Greece. What would you think the need of such measure is?
Question #2: I hate to go back to the issue of the IMF report with regards to the handling of the bailout. I would like to ask, given that they’ve admitted to making serious errors, that they have said harmed Greece’s prospect for recovery, do you trust the Troika to continue guiding Greece’s policies and in many case, imposing them?
Answer: To start from the end, I think that now Greece is going through the so-called “positive scenario”. I will never allow myself to loosen- up. I do not have the luxury to do so. We are going through the right track right now. We want to get Greece out of the crisis. I talked about what happened yesterday before. And I’m confident that we are going to do exactly what it takes to get us out of these “troubled waters”, as fast as possible.
As far as the collaterals are concerned, as it is well known, the Hellenic Republic is not party to the collateral agreement that has been reached between Finland and the four Greek banks. However, the Greek government is pleased that an agreement was reached, as this was a pre-condition for Finland’s participation to the Greek EFSF program. In this way, I understand, it was both beneficial to Greece and to Finland, which, in relation to the EFSF program, enjoys protection against this exposure.
But, I want to emphasize what the Prime Minister just said. Believe me, even a remote scenario of Greek failure does not exist. It is practically, non existing. Therefore, I think anybody who tries to make a story out of this, is exercising on futility.
This is not going to happen. We are moving ahead and so, this remote scenario is non existing and, therefore, this question is of theoretical nature only.
Ακολουθεί η δήλωση του Φινλανδού Πρωθυπουργού κ. Jyrki Katainen:
Jyrki Katainen: Thank very much. Good afternoon everybody and welcome to this press conference. Special thanks to my dear colleague Antonis, for your visit to Finland. You will stay here a bit longer time, because of CES summit. We had plenty of time to talk about Europe and about life, which it has been pretty challenging for many of us, but especially for the decision makers in Greece and, also, ordinary citizens in Greece.
So, we talked about the economic situation in Europe, especially in Euro area, and, also, in Greece. It is very important for us, the Finnish citizens, to understand the very difficult and challenging situation that ordinary Greek citizens are at the moment. The Government has done a lot. Especially Prime Minister has expressed very strong leadership putting through very hard measures. Cutting expenditures, raising taxes and reforming the country from very deep.
It has been very difficult for the people who have done this. It is always difficult to do difficult things, especially when you are reforming and battling with the deficit and debt, but, also, reforming the country. There are several fronts open at the same time. It must been very challenging. But, as we have seen results, we can already see some positive signals, for instance, external balance has been improving, current deficit put in better direction, export is doing better and you are expecting a lot of summer visitors to Greece, which I hope will boost your economy.
So, lots of work has to be done, also, in the future, especially in structural site. It is important for Greece, not for lenders. And it is, also, the best way to stimulate the economy. Investors are not that interested in whether the deficit is 0.3% higher or lower. What they are interested in, is how confident they are about the future of the country. Therefore, the structural changes, especially those who will improve competitiveness, are very important.
We were talking about youth unemployment situation in different European countries, including Finland. And we have a common view on this. We have to do necessary measures, but, also, Europe should be ready to help, especially the countries who are in the most difficult situation, in order to help young people to find at least something. If not a proper job in the first place, then study or apprentice which is also very demanding way to learn professional skills or something else. Because we cannot afford to loose any single soul, because of economic crisis.
We also talked about an issue we are both very interested in. Financing SMEs, or financing investments. Currently, the financial market is not working as it works in normal times. And the private activity is not looking carefully could protect which to enter, because they are more worried about general atmosphere or things. And this is partially very natural. But, we are lacking of jobs in different countries, because small and medium business cannot get financing for good projects. There are plenty of good projects which would be very good even in banks. So, the most important thing is to evaluate the assets of the banks. Because, when you take the reason of questions away, then banks can start lending to each other and lending to SMEs, as the quality review is demanding.
But, the second issue would be, whether it would be possible to use European Budget to finance small and medium Enterprises. And the third, we should be innovative and Finland is ready to participate or actually, we have already been very active, trying to find solutions together with the ECB, European Investment Bank and Commission to find some new innovative way to expand capacity of the banks to SMEs. Because, people need hope and hope comes mane times from jobs.
So, my dear colleague, thank you very much for coming and the floor is yours.
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