Meeting with Jose Manuel Barrosso: statements

March 17, 2010

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MR. J. M. BARROSO: Good evening, ladies and gentlemen. I would like to welcome Prime Minister Papandreou to the Commission.

We have been closely in contact. We have met in the European Council and on other occasions. I really welcome the fact that now we have the opportunity to go more in detail in some of the most important issues that we have to discuss.

I would in fact prefer that this meeting took place in easier times, but I nevertheless want to express my support and full solidarity with Mr. Papandreou’s government and the Greek people.

We have discussed the preparations for the next European Council, including Europe 2020, important issues of the agenda, including financial reform, the G20. But our main topic was obviously the economic situation in Greece.

We are in a calmer situation now than we were some weeks before. And this has only been possible because of the remarkable efforts over the last couple of months by Prime Minister Papandreou and his government.

Thanks to a substantial package of bold measures of fiscal consolidation, Greece is on track to achieve the ambitious target of 4% deficit reduction in 2010. This is a remarkable achievement in its own right.

Restoring economic growth and consolidating public finances are two sides of the same coin. There can be no sustainable economic growth and job creation nor sustainable social welfare, if a nation’s public debt continues to spiral out of control.

I want to say to the Greek people that these efforts are needed, not to please Brussels or the European partners or the markets, but first and foremost for the future of Greek pensions, Greek public services, financing of schools and hospitals, the investment in new sources of economic growth, for the prosperity of Greece and its people.

I want to stress that our rules and the euro area are there not to hinder but to help getting Greece back on track. As you know, yesterday ECOFIN ministers fully endorsed the Commission’s assessment of the Greek situation. They also clarified the modalities of coordinated assistance to Greece, should that be necessary.

The Commission has been actively working with euro area member states to design such a European mechanism of coordinated assistance. Prime Minister Papandreou has confirmed again today that this is not necessary at this stage.

We also discussed reinforced economic surveillance. The financial and economic crisis has made the case more clearly than ever on the need to reinforce economic policy coordination and country surveillance in the euro area, based on the new Article 136 of the Lisbon Treaty. The Commission will make proposals on this in the next months.

I know that Prime Minister Papandreou is working day and night to turn this situation around, and it is starting to show results. I want, once again today, to tell you, my dear friend George, that I have a great personal empathy for your great country, great civilisation, great culture, great people, and the Commission will stand with you.

MR. G. PAPANDREOU: Thank you very much, Mr. President. We had a very good and constructive meeting together with the President of the Commission, Mr. Barroso.

I’d like to thank you and thank the Commission for the acknowledgement of the progress we have made in implementing our stability and growth programme, of all the efforts we are making, but also I’d like to thank you for the help you are making so that Greece can overcome the debt financing problem, and of course the development of the European financial mechanism for coordinated action and assistance.

I was able to inform the President of the Commission, and of course the Commission is following very closely and in a detailed way what we are doing in Greece, that we have fully implemented our obligations, and gone even further.

Today the stability programme, as implemented, is ahead of schedule in Greece. The vast majority of measures, which according to the relevant Council decisions had to be implemented by the middle of May, already have been voted on and passed and are being implemented in Greece. And the ones that are remaining will be voted on and therefore moved through 30 April. So we are well ahead of schedule.

Also a number of other reforms, very basic reforms such as the one on pension reform, have been frontloaded.

We have at the same time taken very difficult and additional measures, both in February and March, which account for an extra 2% of GDP, to make sure that our revenues and expenditures bring the deficit down by the end of 2010 by 4%.

And here I’d like to say that these are difficult decisions; these are decisions which obviously are painful for the Greek people. But at the same time we know that these decisions are moving our country ahead, are making the necessary changes, so that we will be a more prosperous and a more viable and more competitive economy.

We are also executing the budget ahead of schedule. At the end of the first two months of this year, this 2010 fiscal year, the fiscal deficit dropped to EUR1 billion, compared to EUR4 billion during the same period last year. And that shows the trend that we have, and I’d say that this just shows that we can guarantee the achievement of our targets.

I would again express what Mr. Barroso said, that Greece has not asked for financial assistance by the euro area members. We have asked for the political support, which has been given to us, clearly expressed both by the Commission but also by the European Central Bank and the ECOFIN Council and the Eurogroup. And I thank them all for this very important political support.

However, at the same time, we, the Hellenic Republic, Greece, is still borrowing at an (microphone problems) … high interest rate, which is over 6%, and this has created both an economic but also an ethical problem. We are asking people to cut wages, and we are doing so, and then this is lost to the high interest rates we are paying.

So this is the importance of the creation of this instrument, this financial mechanism, which was explained and expressed by President Barroso.

Again, I’d like to thank the work that the Commission is doing and cooperating together. I do believe that this is not only an opportunity for Greece, but it is a major opportunity for the European Union and particularly the eurozone, in moving forward, in dealing with these types of crises. Hopefully we will not have these types of crises in the future, but it is a very important, I believe, step forward.

We did of course talk about other issues, such as the issues of regulation and speculation, but as President Barroso said, our main topic was dealing with the issue at hand, which is moving Greece forward and moving the European Union also forward on this issue.