- It cannot do anything else. We have reached deficits, which are very high. International markets hardly give loans to Greece, they want high interest, the government debt reached to about 113% of GDP and the outlook for this year is to reach around 120% of GDP. In this situation it is imperative to begin any attempt to reduce the deficit. The Greek government announced a program of stability in which there are many measures to curb the deficit and of course, to reduce it. I believe a lot of things were done and we have entered in a reform process, which will reduce tax evasion, which for Greece is a major phenomenon, it will solve the problem of deficit in social security and of course there will be some order in the appointments and salaries the public sector. These are the three sectors that have give birth to the Greek budget deficit and the only way this can be solved is by applying long-term reforms. Many measures have been undertaken and right now they are in process and will soon become laws and shall be approved by parliament. This way there will be drastic change in the way enterprises will be monitored and will be forced to pay taxes – something, which was not done so strictly until now. Moreover, in social security, we see that the government has decided to increase the average retirement age from 61 to 63 years. This is very nice and deep change. Moreover, the government has the ambition to change the pension system and ensure that pensions are a result of the collected savings of workers throughout their active working life. This is something that is not happening right now. At this time in Greece you can get to retirement with much less years of service then 30 or 35. Of course, this is a small pension, but it gives many people the opportunity to go into retirement at a relatively early age and thus to burden the pension system in the country for many years to come. In terms of employment and wages in the public sector we see an attempt to reduce employment and certainly not to increase salaries. The government has already announced a moratorium on employment in 2010 and from 2011 onwards one in every five people that leave, will be appointed. There is a cut in income in the state sector by 10 per cent and it was also announced that there will be no salary increase in the public sector throughout 2010. So measures are being taken. But due to the weak confidence in the Greek government, our EU partners are pressing for more radical reforms and more stringent measures - something that the Greek government is doing at the moment.
- We are witnessing how the Greek government is making claims to international financial institutions. On the other hand, it became clear that the Greek government has used the services of the investment bank Goldman Sachs in order to conceal part of its debts...
- I do not think that these institutions have harmed Greece. Greece has deficits it must reduce. Of course, many times analysts and rating agencies are under the influence of the general negative climate that was created by publications, newspapers, journalists... Even the European Commission, when it announced its forecasts in October last year, warned that if no changes are made in the economic policies, the deficit will grow over 12 per cent of GDP in the next few years. This means a debt of about 150 percent of GDP! Well, people who do not have time to read all about Greece, read these assumptions and formed their opinion that Greece is going to bankrupt. This was an opportunity for markets to attack as well. Credit rating agencies did not bother to check what exactly the case was. Not that Greece has no problems, it has big problems, but in no case can they be blamed on the international agencies. As for Goldman Sachs, there were some transfers for the management of the foreign debt in early 2000, which were quite legitimate and approved by the European Commission. Such transfers are done by all countries, not just Greece. This is a case of technical operations for debt management. Why is this topic so painful now? Certainly there is a link with the behavior of certain markets to "undercut" the price of Greek bonds and to create the impression that the confidence in the country is very low. They are using what has happened in the past as evidence, but it has nothing to do with what is currently happening in Greece.
- What could Greece do in order to regain confidence in itself?
- Trust is lost for the second and regaining it takes years. We will not regain confidence in ourselves before we begin to implement the promised measures. We have promised many things, but very few of them have become laws. Almost nothing of what was announced. Logically, therefore, analysts, markets and everyone else have doubts. But in a democracy, nothing happens overnight. I feel that these measures will be undertaken, because this is our only way out. If we cannot borrow money from abroad will have enormous problems. Therefore, these measures will be undertaken. It is just that markets are moving much faster than the ability of the Greek government to act through democratic procedures approved by parliament.
- There are many discussions in the eurozone of what the economic aid for Greece should be. What do you think?
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