Barroso:
Good afternoon Ladies and Gentlemen,
Prime Minister Samaras and I
have just concluded a very constructive meeting, where we discussed the
upcoming Greek presidency of the Council of Ministers, as well as developments
in the Greek economy and the financial assistance program. I assured Prime
Minister Samaras of the Commission's support in the run-up to and during the
Greek Presidency, in what will be the fifth time that Greece takes this very important
leadership position. The Greek Presidency will play an important role in ensuring
that key legislative files are taken forward in the Council in the first
crucial six months of 2014.
We will work closely with you
and your ministers, Prime Minister, on seeing through the remaining proposals
on a Banking Union, to deliver a successful European Semester and to kick-start
programs under the next seven-year budget – in particular, the Youth Employment
initiative, which we will frontload from next year. So I really believe it's critical
when you speak about growth and investment to have in place all the programs.
That is why we are working with the Council and the Parliament, and it will be
indeed during the Greek presidency that we will have this possibility of having
investments on the ground.
On the economy now: I want to
say that I very much support Greece's efforts in implementing the financial
assistance program. Prime Minister Samaras has once again assured me of his
clear commitment to see it through. The Commission continues to believe that
this is essential to secure Greece's future growth and jobs, and it is already
giving positive results. I really want to congratulate you, Prime Minister,
dear friend, for your leadership and determination. I believe it is key for the
success of the program. I know that the Greek citizens are operating in
extremely challenging and difficult circumstances, but I believe now we can say
there is light at the end of the tunnel.
In fact, we expect a gradual
return to growth in 2014 after six years of recession; government bond spreads
haven fallen markedly since their peak in June 2012; economic sentiment has
improved; the current account deficit has fallen over the last three years and
Greece's debt-to-GDP ratio is set to start declining next year and fall below
120% by 2021. All these are encouraging signals when you think of the doubts that
were expressed some time ago concerning Greece.
But further work is needed to
consolidate these gains. The economic situation is still fragile and this is not
the time to take our hands off the wheel but to roll up our sleeves. Fiscal
consolidation, of course, is necessary. Full implementation of the program is essential
on this point in order to support the return of confidence and for the sake of growth
and job creation.
Stepping up the pace of
structural reform is also crucial. More work needs to be done to reform the tax
system; this is not only about increasing revenues but ensuring social fairness.
I think it's critically important for the support of the citizens to see that
the reforms are not only for competitiveness - as they should be - but also for
social fairness. And when we discuss taxes this is, of course, critically
important. We believe that there is still a way to go to modernize the public
sector and really put it at the service of citizens and companies.
This kind of an economic
transformation takes time and you know that in the short term it and can be
painful. Extremely difficult, from a political point of view, and socially
quite challenging. I want to assure the Greek people that the Commission
continues to stand by you and we will do it also in the future, For example, we
are developing support for unemployed young people or for start-up companies
through the European Union budget.
Prime Minister, dear friend, a
year ago the doomsayers were predicting that Greece would have to leave the
euro. Through your leadership and the determination of the Greek people they
have been proved wrong. Not only that, but we see, now, better signals for the
future. And you will be taking on the responsibility of a Council Presidency of
the European Union. I look forward to working with you at this decisive time
for Europe. I know also your personal commitment to our European values and our
European project.
In May, people will head to the
polls to vote in the European Parliament elections, and it is very important
that we make these elections a moment of European Democracy. And I'm sure that
from now until then, we will make also progress in delivering concrete results.
Some important decisions were taken by the European Council, by the institutions,
by the governments, but we need to be sure that they are really implemented on
the ground, including the most important ones, to tackle the dramatic issue of
unemployment, namely, youth unemployment. That is why putting in place, on the
ground, these programs, and also doing everything we can to start or restart
the financing to the economy, namely to SMEs, is so critical at this moment. Once
again, thank you for your visit. I believe we had a very good discussion and we
remain of course, as always, in very close contact.
Thank you.
Antonis Samaras: Well, I want to thank my good friend President Barroso for his
leadership and for his cooperation with Greece in order to tackle the problem
of the crisis. It has been already made clear that we have discussed basically
two issues. One, the economic progress in Greece and two, the preparation of my
country for the Presidency starting the 1st of January 2014.
After six consecutive years of
very deep, prolonged difficult recession, severe unemployment and a dramatic
dropping living standards, Greece is now obviously reversing the trend.
During the past fifteen months we
have put all the attention we could, all our energy in implementing structural
reforms and fiscal consolidation and for the first time our middle of the year
recession forecast is better than the initial one. And for the first time for
many many years we are getting closer to a primary surplus.
According to the latest data by
the Commission, the IMF, the OECD, Greece is currently producing the largest
cyclically adjusted primary surplus and the largest structural surplus in the Euro
zone.
The structural reforms have been
implemented by over 75% and the competitiveness gap since the year 2000 has
been fully covered.
This is been achieved with
patience, dignity and persistence on the part of the Greek people, in order to
come out stronger from this crisis.
And as the President has just
indicated, it is true that over a year ago many many uncertainties about our
immediate prospects in the Euro zone were heard all over the place but today
there is no more talk about infamous “Grexit” and our recovery is considered
imminent from next year.
Job creation and the return to
long- term sustainable growth is obviously our top priority and Greece’s
comeback will be signaled and will be underlined by the Greek Presidency. The
preparation for this Presidency has started months ago, proceeds at full speed
ahead, we are presenting a bold agenda of priorities which includes obviously
what the President just said, growth, job, cohesion, investments, as you said,
on the ground, the completion of the new EMU architecture, migration, boarders,
mobility and an all encompassing in European Maritime Policy.
And the Greek Presidency is
committed to work for more Democracy, transparency and accountability in the
decision making process. We are looking for an effective cooperation with the
European Commission and the European Parliament, as I said earlier, in order to
deal with all persistent problems of our Union. A successful Presidency at the
first year of our economic recovery will mark a “double return” for our country
in a united and stronger Europe.
2014 is the year of the 8th
Euro Elections, to be held in an obviously critical conjunction, our Presidency
will work hard together with all our partners and the European Institutions to
reverse the current trends, the answer to all current challenges is more growth
and more Europe and above all clear determination to achieve our common goals.
And I want to thank you very much, Mr. President, for this opportunity you have
given me.
Journalist: My question has two parts, it is for the President of the
Commission: I would like to ask you Mr. President, as far as we wait for the
next review of the troika in Greece has already start the debate concerning the
fiscal gap of the period 2015-2016. I would like to ask you if Greece is
obliged to take additional adjustment measures, like cutting more salaries and
pension and additional taxes. And the second part of my question concerns the
financial gap. It is the gap for the year 2014-2015. I would like to ask you if
Greece needs a new program for financial assistance, it means further conditionality,
it means a new memorandum of understanding. Thank you very much.
Barroso: Thank you for your question. First of all, as you know, the new
troika mission is already now arriving in Athens at expert level, the heads of
the different teams are going to arrive this weekend. So, I have to wait for
the report they made after having contacts, of course, with the Greek
authorities. So, from a technical point of view to give us the full picture. I
cannot at this stage speculate about what can be the next steps. What I can
tell you now is that the current program is fully financed until mid 2014 and
it is on track. The Greek authorities are showing strong commitment in
implementing it and we are starting to see the first results of that
commitment. Of course, we all know that for Greece the economic challenges have
been extreme and it is no secret that we have to look again at Greece’s
financing needs and any possible gaps. I am aware of all the speculation going
on about this at the moment but I will not add to that speculation. I don’ t
think it is useful. Nor do I want to pre-empt the results of the mission that
is currently under way. Let’s come back to this when experts have done their
economic analysis. But the word I want to give now to the Greek citizens is a
word of confidence, is that in fact their efforts are paying off and that it is
important to understand that it is not now that we should put in question the
results achieved.
A great part of the issues regarding Greece and other countries and
program has to do with confidence, with expectations. We have spoken about this
with Prime Minister and myself. We have seen and we have seen in different
countries that when there are doubts about the determination of the country,
regarding implementation of the program, immediately there are consequences, in terms of
market confidence, investors’ confidence.
On the positive side, when there are
signals of clear determination and not only signals but also decisions, then
this is rewarded, this is positively seen by the markets. I want to say this to
you why? Because I think this is very important for the Greek citizens to
understand that when the troika is going there- also some times with news that are
not very pleasant to give- but it is there to support Greece. It is not the
question of being nicer or not so nice. It is a question of designing with the
Greek authorities and, of course, afterwards to have the support of the
Eurogroup countries a program that is credible. And at the end, the markets
trust and so, the investors are coming back. And they can create more growth in
Greece and more exports in Greece and so on. And so, in the news and so are
good from that point of view. It serves no purpose and it would be in fact a
counterproductive if now the experts of the troika going to Athens, say “OK, now
everything is OK, nothing is more necessary”. No, because even if they said
that and if they did not solve the problem of confidence, then Greece will have
to pay a higher price.
So, I want to make this point, because I
know it’ s very sensitive. I know also in other countries that I’ m following
very closely this is a critical issue but I really want to urge all those having
responsibilities and I am thinking about
the good for Greece to understand the need to complete the implementation of
the program in a successful credible way. Let me just have one reason for hope. We
are also discussing this now. Some time ago, Greece was one of the less good
performers in terms of structural funds, one of the last in the least in terms
of modelization of the structural funds. Now it’ s the forth. That was
achieved, of course, with our support but thanks to the great reforms and
commitments of the Prime Minister and the Greek administration.
So, people that are now in fact receiving
less, because of the cuts in their salaries, are now showing great
professionalism competence. Greece, I repeat, is the 4th country,
between all the twenty eight in terms of good performance regarding the
utilization of the structural funds. From the 1st of January 2014
there will be plenty of money for Greece. Greece negotiated a very good
package, in a next European budget. So, let’s try to make the most of it, keep
the good work but make the most of these funds for investment, addressing for instance some of the gaps in finance of
real economy, the SMEs that are some of them struggling with a very difficult
excess to capital and one of the key variable for growths is confidence. I’m giving you this very long
answer because sometimes I believe it’s of course not putting the blame on
anybody but some of these discussions, public discussions about financial gaps
and so on can only distract us from what is needed to be done and can only
increase the uncertainty at the moment when what we need is certainty. And I
think now we have already sufficient record to say this will succeed. Of course
the program has to be adopted. Of course it will be. But to make speculations
now about the worst case scenario, I don’t think it is good.
And what I’ m saying I think it’s very strong because I remember
when, also in this building, I was receiving many experts around the world,
they were telling me that by the end of 2012 Greece would be already out of
Europe. So they were wrong. Those speculations were counter protective and
infect Greece has paid a price of that. Greek people have paid the price for
that because all those analyses that were predicted the worst infectively
increasing the interest rates that the Greek people have to pay. That’s why I
think that it is very important that they manage expectations correctly and
this is to be realistic to say yes, this has been done, this was good, this has
to be done, let’s address the issue and I think only it is realistic the
assessment that you can make progress and help Greece and the Greek citizens to
get out of this situation because I believe they will succeed.
Samaras: Well, I want to agree very much with the President. I want to make
sure I say that Greece is back on track. Actually, in some respects it is even
better than targeted, both in terms of structural surplus as well as in terms
of the less of the predicted recession that we are going through. Numbers- in
other words- have been revised upwards. This means what? It means that the
sacrifices of the Greek people are producing tangible results. And I also want
to mention that according to last year’s November 27th Eurogroup
decision if Greece indeed achieves its targets regarding the primary surplus,
then obviously the structural reforms we
are going through, then all temporary funding problems- because you’ ve asked
about this also- will be taken care of. And so, we are achieving our targets.
So, I have to agree that all this talk about the need for extra
financing of Greece has to be along the lines of last year’ s agreement. Not
because Greece has failed, but because Greece has been successful this time
around. And therefore, it requires the helping of our allies. And then, more
specifically, I want to tell you that concerning the fiscal gap for the years
2015 and 2016, we have already agreed to take steps and cover any perspective
fiscal gap of the order that has already been mentioned by us and the troika
and the past of two and the half billion. The agreement holds. We will see with
the new discussions the exact numbers and again what we have to do is not any
additional austerity measures but structural reforms with positive fiscal
impact. And therefore, that’ s what we intend to do on our side, which is stick
with our targets. And this is what we have been doing and I repeat again,
sometimes we go even better that targeted.
Journalist: A question in response to what Prime Minister Samaras said, for
both of you I suppose. Prime Minister, you’ ve spoken about no additional
austerity but really stick into the structural reform targets and you’ ve
spoken about how Greece has in some respects over-performed and surprised
positively in terms of the fiscal front. Is it your feeling that there is no
social, financial and indeed political space for additional cuts on top of
what’ s already been predicted and agreed on for the current year and 2014 as
you go into the budget process in October. Did you discuss this with President
Barroso? I mean, additional fiscal measures for this period and the new year
over and above what’ s already been agreed. And President, Mr. Samaras has been
stressing a new focus and a further focus on structural reforms. Do you see any
willingness on the Commission and the further Euro zone partners to go a little
easier on Greece, given its good performance in the fiscal front and focus
instead on structural reforms. Would you, therefore, be prepared to cut Greece
some slack on fiscal measures and make sure that there is more attention paid
to pushing through some structural reforms?
Samaras: I do not want to add anything more to what I said before in answer
to your question. I think I’ ve answered it already. What we are basically
doing is fiscal consolidation, structural reforms that are necessary, we are
going through, we are on target, we expect obviously our allies to perform
accordingly in terms of what is already been announced from the Eurogroup
decision on last November. So, this is where we are. I am not trying to play it
over-optimistic and just calling it as it is. And I am just saying the facts as
they are and I believe that these are a good solid basis for Greece to try and
perform even better in the future. And this would be, I repeat, a very positive
signal for us when we will be taking over the European Presidency and it will
be a double score for Greece.
Barroso: I am already on record saying that a policy only of fiscal
consolidation has its limits. Political and social limits. That’ s why it is
important to understand that the policy we are implementing in Greece and other
program countries is not just focused on fiscal consolidation. It’ s also about
structural reforms and also about investment, namely investment to support the
poorest in the society and including the biggest issue that is I think the issue
of unemployment, namely unemployment of young people. So, it’ s a caricature to
present European Union policies agreed by European institutions and the
member-states, because it’ s not just of the institutions, it was agreed
unanimously by the member-states to present it as centered in fiscal
consolidation only or alone. It’ s also about structural reform and about
investment. And that’ s why I’ve mentioned before the importance of structural
funds, if they are properly managed and implemented.
Now, even in fiscal consolidation what we have been proposing and
we’ll keep proposing is what we have called growth- friendly fiscal
consolidation. So, we are, for instance,
advocating even for Greece stronger social safety nets. For instance,
support for those that don’ t have else insurance. So, we believe that yes, a
country like Greece and other program countries has to frontload a fiscal
adjustment. Let’ s not forget where we were two or three years ago. If there
was not the frontloading of the fiscal adjustment, simply these countries would
be completely out of the market and there would be no credibility also to ask
for the other countries to make the loans to those countries. So, we were very
close to insolvency in those countries. That’s the reality. We have to face it.
So, the frontload of the fiscal adjustment was not an option. It was the only
way forward. Of course, we have not advocated for all countries in European
Union. We have said that the time that for instance countries surplus could do
more to rebalance their internal demand. This isn’ t proper, because sometimes
people say also that this is a one side fiscal approach. It’ s not true. So, we
have argued for frontloading the fiscal adjustment but as much as possible try
to protect some expenditure, not only the expenditure that can do the right
growth in future but also some targeted expenditure.
Now, when it comes to fiscal consolidation, for instance, reducing
public services that is too big. That is sometimes called austerity. I call it
efficiency and I call it a social measure. Because you cannot have the people
of countries that are in such a difficult, dramatic situation be paying with
their taxes for this kind of public service. So, to reduce the public service,
the dimension of the state administration to make it leaner, to make it lighter
while keeping as much as possible the quality of public services, this is a
good social policy. The same kind tax reform. When I speak about taxes, it’ s
not just collect more taxes. It’ s to have more people paying taxes, reduce tax
invasion and tax fraud, to insure the largest basis of contribution. Because
that is of critical area for fairness. Of course, Greek people are angry and
they are rightly angry when they discover that many people, including some of
the wealthiest were not paying taxes at all. That’ s the reality. They will be
ready to make sacrifices if they see that they are more fair distributed. So,
this is also important. We are not advocating fiscal consolidation for the sake
of fiscal consolidation but what I call smart fiscal consolidation. Another
example is labour market reforms. Of course, it may seem difficult but there is
critical important to have more young people in the market. Because if the
labor market is not reformed, what happens is that the companies, namely small
and medium size companies are not hiring young people. So, yes, artificially
protecting jobs that some times are not competitive or sustainable and you are
condemning the new generation to be in unemployment. Once again, it is citizen
friendly and workers friendly and social friendly. A policy that promotes
market labour reform. Finally, as I have already mentioned should the taskforce
for Greece and other instruments, we are doing the best to increase the support
of European budget, to support the Greek authorities to provide target training
programs mainly for young people. So, I believe this is good a signal, a good
demonstration that we are not exclusively focusing on fiscal consolidation, that even fiscal
consolidation there is some margin to see what are there is we can
and should cut and others where we could not cut or could even put some more
money to protect the most vulnerable an also that yes, I agree with the part
you made your question that the critical issue now is structural reform. By and
large, we can say that Greece has been very very courageous in this track of fiscal consolidation’s efforts. If you compare with other
countries, it has made a huge effort. Some will think it would not be possible,
it was done. But in terms of structural reforms let’s be also honest, they
started sometimes late. There were previous some political problems that
created some doubts and for instance the privatization program also took some
time to be implemented.
I discussed this very frankly and openly undoubtedly, as always with
my good friend Prime Minister Samaras and I think we have agreed that more
emphasis has to be put in the structural reforms and also on speeding the
privatization program that it one of the ways also to address any possible
financial gap, if there is. Because if you have more reseeds, more revenues
from these sources, you can address without imposing on your citizens
additional sacrifices. But these matters have to be dealt with a technical
level and I know that you are very competent let’s say staff there together
with European Central Bank and also with IMF and, of course, with the Greek
authorities that are putting the best of their people in that area so, that you
can after comprehensive assessment now it is reduced. See what is the best way
for it and I cannot now anticipate what is going to be exactly in next steps.
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