The Greek Press Today
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11 September, 2006
Greek Prime Minister Costas Karamanlis on Saturday reiterated his government’s commitment to move forward with reforms and to implement its pre-election pledges while he underlined that he did not intend to undermine the economy by offering irresponsible social benefits to citizens.
In his traditional speech to the country’s producer classes, in the framework of the 71st Thessaloniki International Fair, the Greek premier was clear: “There will be no irresponsible benefits that the economy cannot afford. This vicious circle of pre-election benefits, destabilizing the economy and leading to new harder measures after the elections, must end. The country cannot afford it. The citizens don’t want it. A relation of trust with citizens is based on our responsible policy. Not on irresponsible benefits. I am not going to undermine the economy for any short-lived party benefits. We behave and will continue to behave as a responsible government towards mature citizens”.
Karamanlis underlined that the government was fulfilling its pledges: "We move forward with a plan and a sense of responsibility, to improving farm and supplementary pensions. Farm pensions will rise from 227 to 330 euros per month and a supplementary pension payment will rise from 160 to 230 euros per month in early 2008".
The Greek Prime Minister stressed that, for the first time since joining EMU, the country's fiscal deficit would fall below 3.0 percent of GDP, while the government was promoting a tax reform and raising unemployment benefit payments.
Karamanlis said the government's tax reform was the highest reform, since it was based on a principle of lowering taxes. "We lowered tax factors to enterprises and received positive results. Now we proceed to phase two: lowering income taxes". He insisted on a policy of reforms saying: "in a rapidly changing world you don't just have to deal with problems. Progress means reforms, demanded by an international environment, changing faster, leading, to be prepared, strong and united".
The premier called for a reform pact with citizens saying conditions now are more mature than ever.
"My faith in this country is strong. Greece can move aside past problems to be among the winners, the leaders of a new age. This is a goal to create. This is the vision to unite," he said.
He insisted on promoting educational reform saying: "our top priority is to upgrade the public highest education system to achieve a more open, more creative, more quality education, through dialogue with all interested parties. We need to offer to our youth the necessary supplies to excel in their lives. This is our goal. A goal of responsibility on which we insist. We owe it to the country, to every Greek family child".
"Greece moves with a vision and a plan to tomorrow. We prepare (through understanding and synthesis) the next big institutional reforms," he said referring to a Constitutional reform, changes in municipal authorities and the pension system. "We move, with continuous public consultation, to the grouping of similar pension funds, to combating contribution-evasion, strengthening a system of pensions to handicapped people. We seek a synthesis of views to create a regulatory framework to be introduced by the next government (with the approval of the society). We want a social insurance system to be viable and socially fair.
All changes and reforms favor the attraction of new investments, the opening of new businesses, creating new job positions. This is the only safe way to deal with unemployment, although additional actions are needed," Karamanlis said.
The prime minister also referred to reforms currently underway in public sector enterprises, privatizations, efforts to make a more efficient use of public sector's real estate assets, the flotation of DEPA (Natural Gas Company) in the Athens Stock Exchange, a more efficient management of the state's participation in the Athens International Airport and auctioning Olympic Games' sports facilities.
"Privatization made so far this year offer another proof of the confidence showed by foreign investors to the Greek economy. Our priority is to seek a strategic partner for Hellenic Telecommunications Organization and offering participation in the group's management," Karamanlis said.
The Greek premier said a series of reforms and changes was currently in full swing in the country, such as a transparency system in public sector works, faster licensing procedures for enterprises, drafting a National Town Planning Plan, completing a tax reform, drafting a new development law, and revising bankruptcy legislation.
"Price increases are a disease from the past. We are fighting the problem. Inspections are intensifying along with regulatory interventions to strengthen healthy competition. Our decision is an alliance with consumers, citizens," Karamanlis said.
The premier committed that 80 percent of funds from a Fourth Community Support Framework, worth 40 billion euros, would be earmarked for regional development. "Our goal is to help the country rise among the pioneers of the European Union. We want and can achieve this. In a new global environment, we can achieve only when we set specific targets and know how to achieve them. This is our strategy. A strategy of reforms and changes, based on the support of society. We share will all citizens the vision of a productive, competitive and socially fair Greece. A Greek with national confidence and optimism. I have strong faith in the country's capabilities. I have full faith to all Greeks," he noted.
Karamanlis stressed that Greece, after joining the European Union, has earned a lot, such as 80 billion euros from structural funds, subsidies to farmers, creating infrastructure projects, but failed to promote changes and reforms to ensure sustainable growth, a solid social state, higher incomes and more job positions. He noted that the government's commitment was to open a new historic circle, by promoting the necessary changes and reforms and presented the government's policies so far to restructuring the economy, combating bureaucracy and ensuring economic growth.
The prime minister said results of this policy were positive so far, but stressed that this did not mean all problems were solved: "These results do no mean that all problems were solved. They do not mean we reached our goals in satisfactory levels. They prove, however, that we move on the right track. They certify that Greece moves on a safe road. They guarantee an increasing financial result. Our policy aims to offer a better life to all citizens".
Karamanlis said the country's fiscal deficit would fall below 3.0 pct of GDP this, for the first time since Greece joined the EMU, while economic growth reached 4.1 percent in the first six months of 2006, almost double the Eurozone's growth rate. Greece has improved its position in the world list of competitiveness, recording the third best performance after China and India, while the EU funds' absorption rate more than doubled to 45 percent from 21 percent in the last two-and-a-half years.
Government agencies approved new investment projects worth 2.7 billion euros in the last 18 months, creating thousands of new jobs, while more new enterprises opened last year compared with those that closed. In the first eight months of 2006, investments rose more than 10 percent, building activity jumped 12 percent and net capital inflow on foreign direct investments exceeded 1.0 billion euros, from 145 million euros last year.
Greek exports jumped 22 percent in the first half of 2006, tourist arrivals rose 8.0 percent last year and rising in 2006, shipping foreign exchange and the Greek shipping fleet grew further, while Greek investments in the wider Southeast European market established the country as a leading player in the region.
Karamanlis noted Greek per capita GDP rose from 75.5 pct in 2004 to 77.3 pct in 2005, compared with the average EU-15 figures, the real available income of Greek households rose an average annual rate of 4.3 pct in the last two years, more than double compared with the figure in the period 1998-2003. Finally, the unemployment rate fell to 9.7 pct of the workforce in the first quarter of 2006, from 11.3 pct in March 2004.
Source: Athens News Agency