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J.-M. BARROSO Good afternoon, ladies and gentlemen. It was indeed a great pleasure to have held this important, constructive meeting with the Prime Minister and our colleagues from the Commission and the Greek government.
Let me begin by paying a sincere tribute to Prime Minister Papademos, who has skilfully steered his country through incredibly rough waters these past few months.
The aim of this meeting was simple: to see how we can work more effectively together, to enable Greece to make the most of its cohesion funding at this critical time, and also to see how we can, with this reinforced monitoring and reinforced technical assistance, do more to create hope, hope for Greece. We want to seize this moment, to help get the Greek economy moving again.
I believe this is the right moment to step up our work on growth for Greece. The second programme has been agreed in principle; it will be formally launched next month, provided that these conditions are met, and the private sector bond exchange is successful. And I am very confident that this will be the case.
The second programme has a very strong focus on reforms that we believe will transform the capacity of the Greek economy to generate growth and jobs.
It is important that this is recognised, so that the second programme does not, like the first, suffer from misperceptions as being all about fiscal consolidation. Of course, fiscal consolidation is indispensable, but this is not just a programme of fiscal consolidation.
It is a programme for structural reforms, competitiveness and growth in Greece.
What we are doing is working with Greece to help address deep-seated problems of competitiveness, problems which have simply become unsustainable. This is a huge task. None of us underestimates the scale of the challenges or the obstacles that still lie ahead. But at least progress is being made.
But you must realise that, even if implementation is swift and effective, it will take time for the full benefits of these reforms to be felt. They are structural reforms that take some time to produce results.
And I believe that most of the Greek people, most of the people in Greece, understand that, as in other countries that are now very exposed they also understand that.
But the question now is: How can we accelerate some programmes that can give a concrete support for Greece, support for growth, support for the creation of jobs, and also to mitigate the social impact of some of the measures.
That’s why it was important to have this meeting today, not that the Commission’s support to the Greek adjustment efforts only started today. The task force for Greece, which I set up some months ago, is on the ground and is already making good progress, in providing technical assistance and helping to make sure that you make the most of the EU structural funds.
But I believe that more can be done. There are over EUR20 billion in structural funding available to Greece for the 2007-2013 period. We have already released more than EUR8 billion in payments, but there is scope for doing much more before 2013. And we are already giving priority to the payments to Greece.
This means also that you need to get essential growth-enhancing projects off the ground. We have identified a number of these, which could give a particular boost to investment and employment.
So helping Greece is not necessarily about increasing the financial envelope for the country. It is mainly about using effectively and swiftly what we have. And you should have no illusions. The crucial part of the solution is of course in the hands of the Greek government, the Greek administration, at the end of the Greek people.
The Commission is fully ready to help the Greek authorities in this regard. We also want to help ensure that funding reaches the real economy as swiftly as possible and it is not held up by administrative obstacles or not passed on to the real economy by banks.
That’s why we have discussed today many concrete issues: for instance, the SME guarantee fund, the risk sharing instrument, projects that are some more advanced than others, and we have committed, Prime Minister Papademos and myself, at the end of the next month of March, to make an assessment of progress in these and other areas, many concrete areas that were exposed on the Greek side and also by the different Commissioners and also the participation of the head of the task force and the several director generals.
To conclude, I know there are doubts outside Greece and sometimes also inside Greece about the success of this programme. But my question is the following: Why shouldn’t Greece be able to do it? Why not? I believe Greece is perfectly able to make this effort for structural reforms. We have seen in other countries that this was possible, so Greece can, I am sure, do it, and I am sure that we together can make it successful.
That’s why I want to conclude by thanking you very much, Prime Minister, and also expressing, I hope in my not-very-good Greek, the following: Ναι, η Ελλάδα μπορεί. Μαζί η Ελλάδα και η Ευρώπη μπορούμε. Thank you.
L. PAPADEMOS Let me start first by thanking President Barroso for his very kind words, and also to thank him for organising this meeting that focused on crucially important issues for Greece.
Over the years, the Commission has provided very valuable support to my country, and I would like to take this opportunity to thank again the Commissioners, the Task Force for Greece, as well as the Commission services, for their support to our efforts, especially over the last two very difficult years.
Now, as President Barroso said, during the meeting that was held today, in which a number of Commissioners also participated, we discussed a wide range of issues. But among these issues I would like to emphasise on two. The first was how to better absorb and effectively use the available EU funds, the structural, regional and social funds.
And second, we discussed the definition and elaboration of concrete policies and financial instruments that can support economic activity and foster job creation, especially over the short and medium term.
The new economic programme that was recently adopted by Greece and voted in the Greek Parliament, the second financial package for Greece that was agreed upon in the Eurogroup last week, and also the private sector involvement in the refinancing of Greek sovereign debt, are also very important steps that will improve the economic prospects for my country, and they will also establish conditions that are conducive to higher and sustained growth.
In particular, the new economic programme, as also President Barroso underlined, is comprehensive and appropriate, and it includes a wide range of reforms, some of which are very bold and far-reaching, that will improve efficiency both in the private sector and the public sector, will restore competitiveness, and therefore will foster higher sustained growth over the medium and long term.
However, in the short term, the fiscal consolidation process and the shortage of liquidity have adversely affected economic activity and employment, and have had serious consequences on social welfare, as well as for the effective implementation of the programme.
For this reason there is an urgent need to complement the policies and reforms included in the second economic programme for Greece, with concrete measures and other actions that can have an immediate and positive impact on economic activity and employment, and also help address the social consequences of the adjustment effort.
Now, during the meeting a number of the policies that were discussed and were agreed upon were, first, the establishment of a guarantee fund for small and medium-sized firms, using structural funds as guarantees and the leverage of the EIB; second, a risk-sharing instrument to finance infrastructure projects and other important investment projects, again using structural funds and EIB leverage.
We also discussed measures that will help accelerate the absorption of EU funds, by making the procedures simpler and more effective, as well as actions to be taken related to some very important strategic projects for Greece, such as the Helios project, which will exploit the country’s comparative advantage in renewable energy sources.
Now, the implementation of these measures will of course require strengthening the administrative capacity in Greece to absorb EU funding, but also it will require continued close collaboration between the European Commission and the Greek authorities. And we are looking forward, in the coming days and weeks literally, both in order to fully implement the new economic programme that has been adopted, but also to implement the complementary actions that have been discussed and agreed today, that aim at fostering economic growth and job creation in the short term.
So this government will do its utmost to implement fully and effectively both the programme and the complementary actions, and I want to thank you again for your initiative today and for working together in the future for supporting Greece. And I would add to your remark at the end: Μπορούμε, και θα το κάνουμε.
MODERATOR Thank you very much, President. Thank you, Prime Minister. We only have time for a couple of questions before the President and Prime Minister have to move on. Please state you name and the media you represent.
M. STEVIS (Dow Jones Newswire & The Wall Street Journal) I have a question regarding a proposal by Eurogroup Chairman Jean-Claude Juncker this morning. This is a question for both the Prime Minister and the President. Mr. Juncker this morning in an interview proposed that Greece get a restructuring, for a lack of better translating, commissioner, to oversee the return of the country to normality and growth. Is this a proposal that is interesting to you? Would you accept that, and how would that be implemented? Thank you.
J.-M. BARROSO I already answered this morning. It’s better to listen to the opinion of the Prime Minister of Greece, I believe.
L. PAPADEMOS Well, what I would like to say here is that the new economic programme for Greece will be implemented by the Greek government and the Greek authorities, and in doing that we welcome the support of the European Commission, the Commissioners themselves and the Commission services. And I think this is sufficient, our own work and the cooperation with the Commission ensure the effective and full implementation of the programme.
J.-M. BARROSO What I can be more precise on, in terms of the management of the programme by the Commission: We have here two lines. One is the reinforced monitoring of the programme, approved now by Greece and by the Eurogroup, following a proposal of the so-called Troika, so the Commission, the ECB and the IMF.
That programme was approved by Greece, the government and the Parliament, and was approved unanimously by the Eurogroup. Now, the Eurogroup gave a mandate to the Commission to an increased monitoring of this programme. We will do it, and we are doing it.
At the same time, we need to increase the technical assistance to the implementation of the reforms that are under way in Greece. That is why I have created, already some months ago, a task force, a task force here in the Commission, but that not only makes the coordination of the expertise of the Commission but also with member states experts that are willing and in fact are already participating in this technical assistance.
And so in terms of afterwards of the management, we need – and that was precisely one of the requests of the Greek government – we need to mainstream, we need to integrate those elements. It makes no sense in terms of management to be doing one thing with one hand and the other thing with the other hand.
The important thing is to make these reforms happen. The programme that was approved is not just, I insist, a programme of fiscal consolidation. It’s a programme of structural reforms, an extremely ambitious programme for relaunching the conditions for growth in Greece.
And internally in the Commission this task force reports directly to the Vice President of the Commission for the euro and to myself directly. I am making this a priority for the Commission, not only for one Commissioner, for all the Commission, because in fact, and as we have seen now just in this meeting, this touches many areas. This does not touch only one Commissioner. From the Social and Employment Commissioner to the Agriculture Commissioner, to the Cohesion Fund or Regional Policy Commissioner, to Energy, we have discussed today many important projects in terms of energy.
To many other areas this involves all the administration in Greece, but almost all the departments in the Commission. And what we are going to do now is to implement these reforms, or, to be more precise, the Commission is going to support the implementation of these reforms, because this is a responsibility above all of Greece.
No solution can be found outside Greece. We are here outside supporting Greece. So it is an illusion to think that someone outside Greece is going to solve the problems of Greece. It is the structural reforms that Greece is making, and the authority of its democratic institutions, that can have a success. The ownership of the programme is critical.
And what we can and we are doing, the European Commission, the Eurogroup and others, is precisely to support those extremely challenging efforts.
MODERATOR Thank you very much.
L. PAPADEMOS As I explained some time ago in my speech in Parliament when the new economic programme was discussed and approved, the responsibility for the implementation of the new economic programme rests with the Greek government, the Greek Parliament and the Greek people.
So the Greek people are the owners of the programme, and I think it’s quite important, as President Barroso said, that the services provided by the task force for Greece and the other Commission services are now more integrated and cooperating together, in ensuring the more effective implementation of the programme.
MODERATOR Thank you very much. Greek television and BBC asked for the floor at the same time, so if the President allows just two short questions, the Greek question first. Go ahead.
Th. ATHANASSIOU (ERT3) The Commission had been supporting Greece for the reforms with surveys and essays for more than ten years, and we know the proposals are very specific for the last ten years. What makes you think that this time is going to be different?
J.-M. BARROSO First of all, because people learn. And now the sense of urgency is completely different.
As I said earlier, just now Greece has approved a very ambitious programme. Frankly speaking, that kind of programme would be unthinkable some years ago. And why did the Greek government and the Greek Parliament support this programme? Because they believe it’s the best solution for Greece, and that indeed there is no other alternative, to be frank. There is no other alternative.
And I think that when there is no other alternative people understand much better the urgency of the tasks ahead. And also in the euro area there is this sense of urgency. So I believe now what we have is a sense of urgency that frankly there was not before.
And also this programme has nothing to do with the traditional reports that we can do from outside. This is a programme with a strong ownership by the Greek authorities but also with a reinforced monitoring by the Eurogroup and of course by the Commission. So all this makes me believe that it is perfectly possible, and not only possible but probable, that this programme is going to work.
L. PAPADEMOS Let me add two remarks one concerning the past and one concerning the future.
It was implicit in your question that very little has been accomplished in the past. And I would like, in response, to mention two numbers, because I believe that reality is better than the image.
Over the past two years, the fiscal adjustment that has taken place in Greece is impressive. In a period of two years, the primary deficit of the public sector declined by eight percentage points of GDP. If this is not substantial fiscal adjustment, I don’t know which one it is.
Second, as competitiveness is a very important objective – it was an important objective of the first programme and it’s a very crucial one for the second programme – let me mention that over the past two years competitiveness, as measured by relative unit labour cost, against all our trading partners, 37 trading partners, improved by one-third. That is, in two years we restored competitiveness by one-third, relative to the competitiveness lost in the previous ten years. And the competitiveness gained in two years vis-à-vis the euro area and European Union partners is equal to one-half, 50%, of the competitiveness lost in the previous ten.
Now, looking forward, the reforms, particularly the reforms that will be introduced both in the labour market and in the product and services market, I am fairly convinced that they will fully restore competitiveness over the period of the programme, over the next three years. And I am fully convinced that the majority of the Greek people – and what I am saying is reflected in recent polls that were taken after the new programme was adopted by the government – are fully supportive of the programme.
Indeed, according to one poll, 67% of those surveyed said that they were looking forward to the successful implementation of the programme, because they realise that there is a need for change in the country, for reforming the functioning of the economic and of the public administration, and for achieving sound public finances, which can provided the foundation for sustained growth.
So in two sentences, a lot has been accomplished in the past, more than often recognised. And second, I believe that, on the whole, despite differences of views of course by some, there is strong support by the Greek people for moving forward and implementing the new programme in addressing both the competitiveness and fiscal problems.
MODERATOR Thank you, Prime Minister. A last quick question to the BBC.
C. MORRISON (BBC) Prime Minister, it’s clear that Greece has lost the trust of significant political elements in countries like Germany, the Netherlands, Finland. How do you restore that sense of trust?
And Mr. President, are you confident that all euro members share your confidence that this programme can actually work? Because even though you both say the solution lies in Greece, this is a Greek programme, without that sense of trust and confidence, how do you have the time to implement the pro-growth measures that you both say you want to put into place?
L. PAPADEMOS: Well, you restore trust through actions, as well as by conveying in a more effective way what has already been achieved.
I gave you two very simple examples that I have found again and again in recent weeks that are not fully known.
But you restore fundamentally the trust and the confidence through the full and effective implementation of the programme in the coming years. and I think the Greek people are ready to do that, and I think better communication can also play an important role to achieve the objective of improving understanding, I would say, and confidence.
J.-M. BARROSO Let’s be honest: There have been problems of confidence. We know that. And that also was aggravated by the fact that sometimes in Greece important voices were questioning themselves the programme, and also outside Greece, and also sometimes outside Europe, important voices were questioning all these efforts.
But I believe the best answer to your question is very simple. Unanimously the member states of the euro area now decided a new programme, a programme that will amount to EUR130 billion. Do you believe people put EUR130 billion if it believes it not going to work? That’s the best answer.
If you ask the 17 members of the euro area committing to a new programme to support Greece and loans that can go up to EUR130 billion, apart from what was already given as a loan, I think this is the best, the best evidence that they believe it will work. If not, it would not be a responsible decision. I don’t believe that the Finance Minister has approved such a programme thinking that it will not work.
So in fact we have an obligation of success. Probably I am saying this more emphatically than others, but someone has to be very clear about this. I don’t think that we can put a lot of money in the table like that – and it’s a lot of money by any standards – and believing that money is going to be lost.
No, the euro area member states unanimously – and we are grateful for their effort – have decided to commit that money because they believe they are going to get paid. Of course. That I think is the best evidence that the programme is going to work.
And of course it will be of some help if some of those that are – I can use a Greek expression – the Cassandras, the professional Cassandras, always giving up to the intellectual gloom of pessimism, one day start thinking that it may work and that sometimes sceptics are wrong.
MODERATOR Thank you very much, President. Thank you, Prime Minister. Thank you all for coming. This concludes our VIP corner.
