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Australia’s ABC tv | Interview with Philip Williams

February 24, 2010 | categories : Interviews, Prime Minister

London, 24 February 2010
“Lateline”

Presenter: It’s morning in Athens, and thousands of Greek unionists, public servants and pensioners are preparing to take to the streets to protest against the Government’s harsh austerity package. The plan is to tackle the country’s crippling debt crisis. Wages will go down, taxes up and older people will have to work for longer before getting the pension. They’re all elements of a deal with the European Union to cut the deficit in exchange for guarantees in the bond market. Governments like Germany and France are reluctant partners in this rescue attempt. But there’s a greater fear that if Greece goes down, other European economic weaklings, like Portugal, Spain, Ireland and even Italy might follow. That contagion could bring on another global recession. High stakes indeed for the recently elected Prime Minister, George Papandreou, who’s been in London looking for support from Gordon Brown.

Our Europe correspondent Philip Williams asked the Greek PM where his country had gone wrong.

George A. Papandreou
: Corruption, cronyism, clientalistic politics; a lot of money was wasted basically through these types of practices.

So we need to make some real deep structural changes, as of course dealing with the immediate problem of the deficit. This is a very difficult crisis, it is one of the worst that’s hit Greece in the past decades.

But let’s make it an opportunity to restructure government, economy, be more competitive and be more sustainable.

Philip Williams: Of course, one of the key elements that you need to do is restore confidence and restore confidence in the markets. Now, you’ve got a test coming up you’ll have to issue bonds; are you confident that there will be demand for Greek bonds at a reasonable interest rate?

George A. Papandreou: Well first of all I would agree with you our major deficit is not a financial one it is a credibility deficit and this is what we’re working on with taking major changes, making our budget very transparent.

Every signature of every minister and every civil servant that has to do with money from central to local government is going to be on the web. Our statistics bureau; now we’re creating an independent bureau so we don’t have any fear of fudging of the figures.

Philip Williams: That’s quite incredible isn’t it to think that the national figures were basically cooked for years?

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George A. Papandreou
: That is something which we have been very unhappy about and we’re making that major change in fact to create; I would say Greece now will become the most transparent, or one of the most transparent countries in the world and in the European Union.

So I think as weeks and months go by the credibility of what we’re doing, will shine, will show and we will get that initial credibility from the markets. Now what we need is to be able to have this breathing space in order to show that we are credible again.

And that’s the breathing space where the European Union is helping us by saying, if push comes to shove we are here to help finance the Greek bonds, not by giving money to Greece, we’re not asking for bail outs or handouts, we’re saying we need to be able to borrow at a similar rate.

So this is what would happen; other countries would help us in order to borrow at these rates which are lower rates.

Philip Williams: And of course you’ve also got an austerity program which is quite tough cuts to people’s wages, conditions, pensions. It’s one thing to announce that program it’s another thing to actually get the people to cooperate.

George A. Papandreou: We have come to a moment of reckoning if you like for Greece to make these changes and it will be painful, people know that, but I think people are saying – let’s do it, let’s get it over with and that will open up a new prospect for a much more sustainable economy and create and solve some of the chronic problems we’ve had which in fact Greeks do want to solve.

We don’t want to have huge bureaucracy, we don’t want to have daily corruption in our hospitals, in our government, in our public service. We don’t want to have tax evasion which doesn’t then allow us to implement policies for better education, better health, better social security.

So these are things which people I think really understand must be done.

Philip Williams: And yet we’ve already seen in the streets we’ve seen demonstrations by public servants, by taxi drivers, by farmers; we’re seeing unionists in the street.

George A. Papandreou: Obviously if the pain becomes too much there will be problems but I believe that people understand that these changes must be done and we do have wide support. Even today after we’ve announced these austerity measures and this program we have a public approval rating between 60 to 70 per cent.

Philip Williams: Does that surprise you given the toughness of the cuts?

George A. Papandreou: It’s a positive surprise. As a matter of fact I would, I could, and you know this because Australia has lived through Olympics, I would say that the spirit we have of unity and determination today in Greece I can only compare it to what we felt during the Olympics.

Of course that was a time of jubilation but there was a real sense of unity. Now’s a time of crisis but again there’s a sense of this wider approval, of let’s move on, let’s make these decisions, changes let’s change this country.

Philip Williams: Do you ever wish in your quiet moments you’d lost the election, that this wasn’t your problem?

George A. Papandreou: When I’ve taken on posts they’re usually during crises. It’s going to take a lot of hard work and difficult decisions and we are already doing that. But I’m optimistic we can get through this and we’ll move ahead and make this crisis an opportunity.

Philip Williams: The very best of luck. Thank you.

George A. Papandreou: Thank you very much.

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