Prime Minister Costas Karamanlis on Sunday reaffirmed his government's dedication to a high-profile policy of reforms, especially in the bloated public sector, as well as tidying up the economy for the benefit of Greek citizens, particularly those in the lower-income brackets, as he said. 

Speaking at an across-the-board press conference during the first weekend of the 70th Thessaloniki International Fair (TIF), Karamanlis noted that "we are in the middle of a difficult, uphill course ... priority is on the fiscal condition, and we are continuing with persistence in that direction".

Replying to press questions, the prime minister stressed on several occasions that the government was obliged to take unpleasant decisions, but noted that the first signs that its policy was yielding results was already visible.

He explained that one could not exercise social policy "with borrowed money", stressing that the living conditions of the less privileged and economically weaker classes improves when the economy improves, whereas those social groups face greater burdens vis-a-vis economic hardships. 

The prime minister also reiterated that all pledges made by the government still stood and would be fulfilled over a four-year period.

"All those who think that social policy can be exercised with words or borrowed money are seriously deluding themselves. The priority is on rendering the economy healthy. This is a policy of responsibility. It is easy to exercise a policy of impressions, but then the burden falls on the shoulders of the taxpayers," he said.

Within this context, Karamanlis said the government could not grant a heating oil subsidy under the present circumstances. "The fiscal reality does not allow such margins in the present state of affairs," he explained.

Karamanlis further explained that more flexible labor relations in state-owned public utilities and enterprises, known as "DEKOs", will apply to new hirings - such as abolition of tenure, for instance. With respect to public sector hirings, he clarified that "what is in effect today will also be in effect under the new regime ... in other words, hirings will be under the control and supervision of ASEP (public sector hiring examinations board)."

Karamanlis stressed that it was a "point of principle" for his government to combat phenomena of favoritism and partisanship, noting that he would not put that top policy choice at risk in order to serve whatever interests.

Future of OA: Regarding the future of ailing national carrier Olympic Airlines (OA), and in view of a pending European Commission decision this week on whether the company received, directly and indirectly, tens of millions of euros in illegal state subsidies, Karamanlis said it was a difficult case and that, in anticipation of the Commission's decision, the only thing he could say at this time was that "OA cannot operate in its present form and structure".

Karamanlis said that alternative options were being examined for "the morning after", while noting that the alternatives were "not many". However, he also emphasized that "no employee will find himself on the street".

Social security reform: In other matters, he premier reiterated his government's decision to hold a lengthy dialogue on the social security reforms, noting that "we are not speaking about quick or surprise decisions". He nevertheless emphasized that this (reform) is "perhaps the largest structural change".

Moreover, he invited citizens, social partners and political parties to a dialogue aimed at reaching consensus and based on hard data, a dialogue that will precede any decisions.

Rules out gov't reshuffle: In response to the ubiquitous press questions over a possible government reshuffle, the prime minister said "governmental changes are not among my plans", adding that his government had a difficult task ahead but was progressing well and had produced substantial work in the 18 months it was in power, although it still had an uphill road ahead.

Asked about the possibility of a smaller and more flexible Cabinet, Karamanlis ruled it out at this stage, given that it was a complex issue and was related to the structure of the state's administrative mechanism.

"When we reach the point when this can be done without taking risks, without political or partisan expediencies, it may be done, but it must be well prepared," he said.

The issue of last week's expulsion of a ruling ND deputy (Evangelos Polyzos) from the party's parliamentary group, Karamanlis said it was not his intention to "seal mouths" adding, in reply to relevant questions, that freedom of speech and dialogue existed. Conversely, he stressed that serious and unsubstantiated accusations could not be cast about against the political world, especially when they came from a Parliament member. This, he stressed, was a point of principle.

Fight against corruption; tax breaks: He told reporters that another point of principle was the fight against a lack of transparency, corruption and special interests. Along those lines, he said negotiations with the EU to find common ground over the "primary shareholder" law were continuing. Asked about reductions in tax coefficients by 2007, something the premier announced a day earlier here during his keynote address at the Thessaloniki International Fair, he said he was not yet ready to unveil the details, although he stressed that such reductions marked a commitment of his government.

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