After winning approval from Eurozone finance ministers and the International Monetary Fund for the release of $56.7 billion of rescue loans as part of a second bailout of $172 billion, Greek Prime Minister Antonis Samaras is turning his attention to domestic matters, as shown in a Cabinet meeting on Nov. 28 where he directed his ministers to get down to work instead of crowing.
He set a timetable for each ministry, including a strict surveillance he would undertake to improve the government’s efficiency. He said he wants to push development and job creation and stressed that promises will be kept.
He said, “Recently, we had the big issue of the European struggle. This battle ended in the last Eurogroup. I don’t want you to blow trumpets, we have to manage our problems in the right way. We can’t speak of success when things are so tough.” Samaras noted the need for each ministry to comply with its budgetary restrictions and implement its obligations. Samaras also noted the need for ministries to develop synergies that would enhance the country’s privatizations strategy. At the meeting the Greek premier asked the coalition’s ministers to refrain from making “triumphant” statements in the aftermath of the deal.
He congratulated Finance Minister Yiannis Stournaras for negotiating the deal with the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) and gave honorable mention to his other ministers who he said, “You gave everything to the point of self-sacrifice, even at the expense of your health,” he said.
He continued, “Now everything is over. As of yesterday, we draw conclusions. We will correct any mistakes we have made. The government abroad is now credible. No one will be allowed to hurt the credibility of Greece. I want you all in solidarity, like reinforced concrete, coordinated. We carry on, we have to keep the perquisites coming until the end of December, their friendly acts toward society and do good to competitiveness.”
He presented a triptych he said would define the operations of the ministries. “Strict supervision of every ministry in its budget, an automatic check control, application of the measures without being lax, help by everybody in privatizations. The primary surplus is the aim of every ministry and that’s why there will be supervision. With the surplus, we can dispose 70 percent to correct injustice. The desired result is the coordination of ministries with the secretary of the Cabinet, Takis Baltakos, responsible.”
He stressed the target was development. “I won’t spend a lot of time in Maximo (Prime Minister’s mansion) and frequently will be in the ministries and be a different prime minister. The target is for job positions and that’s how people are going to judge us.”
GETTING DOWN TO BUSINESS
He said the third point is to form the correct environment for businesses. “A memorandum will be signed between Deputy Finance Minister Christos Staikouras and every minister whose ministry has overdue debts to individuals. In total, they amount to 9.3 billion euros, ($12.03 billion) of which 850 million ($1.1 billion) have to do with tax returns. It’s a matter of credibility of the state.”
In closing, he said, “We have finished with pending issues abroad. Now we have to win over the citizens. With a better public administration and faster results. I promise to be near you, you will set as goals timetables which will be kept. We got from Europe a certificate of good governance, which you earn in a difficult way and you can lose easily.
Stournaras said, “We are at the zenith of credibility. In July, the atmosphere in the Eurogroup was hostile, now everybody is our friend. As they said in Europe: Greece did what had to be done.”
He also said one of the most critical parts of the complicated deal, which includes lower interest rates for Greece, a longer repayment period and a 10-year grace period on some interest payments, was a scheme for Greece to buy back bonds it had issued at 30 percent of their value.
That will depend on the state, as well as Greek banks and other investors taking a chance on buying the bonds as well, a difficult task after a previous government imposed 74 percent losses on investors, including small bondholders in Greece and the Diaspora who lost much of their savings. Samaras said ahead of the June 17 election would compensate them but has ignored them since taking office.
Stournaras though investors have to believe that this time Greece won’t deceive them. “It’s a patriotic duty that the program succeeds,” he said. He said the proposal to buy out the bonds would be announced next week and open for almost a week. The Greek public sector will be disposed to buy 30 billion euros ($38.8 billion) worth of bonds for 10 billion euros ($12.94 billion) that will come from the new loans from the European Financial Stability Facility (EFSF,) besides the $57.56 billion from the new bailout loan installment.
He avoided commenting on reactions of the banks and financial institutions who want to avoid the consequences of potential losses by participating in the program. He didn’t make it clear that if they do take part if it would be enough for the target to be met set by the Troika to make the effort a success.
He stressed that, “It is a matter of credibility of our country,” to be successful in the debt buyback program. “At the time, the national parliaments of other countries will decide on the cost that each state member of the Eurozone will bear,” he added. He said there is a backup plan in case there is no response from the financial institutions and foreign holders of Greek bonds.
Stournaras said the “decision by the Eurogroup and IMF is important because it keeps Greece in the euro, it gives it a significant chance of getting out of the cycle of recession and over-indebtedness and contributes to the reduction of its debt.”
He said the further lowering of interest rates at which Greece is being lent money by its Eurozone partners is a major boost.“ Greece is now a country that is borrowing at a very low rate compared to other countries in the euro area,” he said. The rate will be 0.69 percent
(Sources: Kathimerini, Protothema)
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