Meeting with Angela Merkel in Berlin | Statements
PRIME MINISTER
PRESS OFFICE
February 23, 2011
MS. A. MERKEL: Well, ladies and gentlemen, I am delighted to be able to welcome the Greek Prime Minister, George Papandreou, here as our honoured guest. That offers us an opportunity to address European issues.
I would like, if I may, because of current events, to make a few comments on the situation in Libya, which we obviously also addressed in our talks. Greece is an immediate neighbour to both Egypt and Libya, and therefore it will also be affected by the unfortunate events there. The news we received from Libya both yesterday and today are deeply worrying. The speech of Colonel Gaddafi of this afternoon was horrifying, particularly because he basically declared war on his own people, and we are saying clearly and unequivocally that we call upon the Libyan leadership to immediately cease using force and violence against their own fellow countrymen, and should this use of force against their own people not be stopped, Germany will work using all diplomatic means in order to exert pressure on Libya, including possible sanctions that will be imposed on Libya.
We believe that the situation on the ground is deeply worrying, and this is why it is very good that the United Nations Security Council should seize the matter. Apart from that, we do not wish the use of force against the people of Libya. First and foremost in our mind is also the security and safety of our fellow countrymen, who are still there on the ground. The Foreign Minister has taken measures in order to ensure the security and safety of our fellow countrymen.
Today we addressed, as I said, the situation in Europe. We also addressed the situation in Greece. We will continue this over dinner. I would like to very clearly say that the Greek government has made a lot of efforts and has brought Greece on a much more progressive course. Very painful reforms for the population have been introduced, and I think that the Greek Prime Minister and also the whole of his government has stood the test of time and has proved that they are willing to pay the political price, and we respect and admire him for this.
And the fact that the international institutions, the European Central Bank, the Commission, also the IMF have said that the tranches of the programme ought to be paid out shows that they feel that the obligations of the programme are fulfilled. And I have no doubt at all in my mind that Greece is going to pursue this course and it’s going to thereby lend its contribution towards rendering the euro a stable currency. And I think we are all at one in saying that we want to work together in the European Union, but in particular among the eurozone members, for the stability of the euro.
We will have an informal meeting of the eurozone member groups on the 11th of March, and also a General European Council on the 24th and 25th of March.
We, on the German side, there is also agreement between us on this, will address the German package of measures. We want a small Treaty change. We want a durable security measure for the rescue package, and we also want to render the Stability and Growth Pact stronger. We want to agree on this, and we also need to talk about this with the European Parliament, and we also said that we want to outline a political strategy that allows us to grow closer together, so not only the Stability and Growth Pact is important but also improving the competitiveness of the euro member states will be a central point and should be a central point.
And on this we will table first suggestions on the 11th of March. Not all of the proposals will be on the table then, but I am gratified to know that we will be able to work with this, because if Europe has to stand, it must be internationally competitive as well. We need to ensure the prosperity of our citizens, and we need to remain competitive on a global level.
We have also initiated a German and Greek partnership, and the Greek Prime Minister was here about a year ago. We launched this Greek and German initiative. We agreed to cooperate in many areas. This cooperation was launched in the meantime, and I think that Germany also in this way, in a very small way maybe, wishes to give its contribution to supporting Greece in various ways.
You have demonstrated, and these were not easy months for any of us, demonstrated, as I said, that we take our political obligations seriously to render the euro stable, that this is an issue that is actually an issue for all of us and that each and every one needs to do his or her bit in order to strengthen the euro. We are going to coordinate our measures in this respect.
Thank you, and again a very warm welcome to you.
MR. G. PAPANDREOU: I would like to first of all agree with the Chancellor concerning the developments in the Maghreb and the countries of the region and Southern Mediterranean.
Here we have spoken about these developments that we have been witnessing in Northern Africa and the Middle East. And of course by virtue of both geography and history, Greece has an important role to play in that region. Already because of the events in Libya we are involved in the evacuation of a large number of citizens from a number of countries to Crete, and then sending them off to their countries.
We condemn the violence. We deplore the use of force against civilians. Certainly violence cannot and will not bring solutions. It will not bring the much needed change and reforms, and these reforms are the request, the demand, of the peoples of the region.
Many countries in the region face unrest, small revolutions or large revolutions. Every case is of course unique. We know the difficulties. And Greece is part of the region. Greece is also part of Europe and working with and for Europe for stability in the region, as well as fundamental reform.
We need to be bold right now and we need to think in the large terms, standing by the side of the peoples of Northern Africa and the Middle East, and assisting them in changing basically everything: their societies, their economies, their politics. Change that they, the peoples themselves, will make happen. Europe has an important role, a major role to play and has major interests in seeing this transition is a democratic and smooth one. We will live up to our obligations, and Greece will also do its part.
Now, on the financial issues, I want to reiterate and remind you that I was here approximately a year ago, here in Berlin, to meet with you, Angela, and since then a lot has happened. A year ago, Greece was on the verge of bankruptcy. We then in the European Union together took important decisions. These decisions gave us the time, gave us the necessary resources to save our country, but also to chart a very different course, a viable course for our economy.
And Germany’s role was instrumental, the solidarity shown by the German people was invaluable.
We undertook, from our side, the commitment to put our house in order, to make changes that were long overdue. We have delivered, we are delivering, and we will continue to deliver. These are commitments to the future of Europe and to the future of our people.
In one year, we have reduced our deficit by six percentage points of the GDP. We undertook a groundbreaking pension reform, to make the system one of the most viable pension systems in Europe. Tax reform, to make our system more socially just and attack the rampant tax evasion.
Budget and public administration reform, to rein in spending and bring full transparency to the spending of money and to decision-making.
We have opened up all closed professions, approximately 100, and reformed our labour market to give opportunities to young people.
And we are continuing. We know it is a marathon, but we have started with a sprint.
It has not been easy on the Greek people. It has demanded many sacrifices. And allow me once again to express the fact that there is a strong commitment by the Greek people for the change in the country, for the stability of Europe but also for the future of Greece.
One thing is certain, that we will succeed, if the Greek people continue to be convinced that their sacrifices will not be in vain, that a stronger, more just, more competitive Greece, a new Greece, will emerge as a result. And this new Greece will emerge, we are convinced, and is emerging.
This also is a year where we have faced, realised together that there is a challenge to Europe, a European challenge. It is about our common currency, the euro, about our common destiny. It is to rewrite and strengthen the rules, and complete our greatest achievement, a true economic and monetary union, one that produces jobs for our citizens, growth for our economies, one that makes us more competitive in the international markets, one where we will all keep our houses in order, our finances under control, one where our financial systems respond to the needs of our economy and societies, and not the other way around.
A strong and convincing message is what is needed and must be given by us, and I am convinced that we will deliver this message by the time of our March European Council summit. And this of course is a comprehensive package, which Angela just described, which will address these issues. We are working towards this, and this meeting here is the opportunity for me and Angela to discuss these issues and advance the discussion.
I would like to express my appreciation for your personal efforts, Angela, to create a new and common European architecture, in order to deal with the new challenges we have ahead of us. And I also would like to thank you for your support, your friendship and your hospitality. As I said, I see, as Angela said, that we have also a very close bilateral cooperation in areas from tourism to health to green development, to our environment and forests, and I’d like to thank you for that also.
QUESTION: A question addressed to you, Madam Chancellor. How do you assess the reform course that the Greek government has embarked on up to now? How do you assess the quality of it?
And allow me, if I may. I would like to add that I noticed that among the German population there is a widespread fear that in the end it’s going to be the German taxpayer that’s going to foot the bill. Is that a fear that is justified, in your opinion, and what are you doing to act against that fear?
MS. A. MERKEL: Well, I can obviously gladly repeat what I have already said. Greece, as the Prime Minister called this, has started to put its house in order. And that is something that we have been following with great interest, with respect, and people here in Germany are also seeing that, and that also has had its effect, because we see that this is not an easy course. It is one that requires great political boldness and courage. And if you look at the many strikes and protests on the streets of Greece, you can see that there is a certain level of resistance, obviously, also.
And I think there are many people here in Germany that share the conviction that Greece is on the right track, but that there remains a lot to be done yet. And the steadier the course will be pursued, as the Prime Minister has outlined it just now, the more there will be a growing awareness here in Germany and a growing credibility also for this course that Greece has embarked on.
And there is also the knowledge here in Germany and the awareness that we all share one and the same currency, and that Germany draws quite a lot of benefits from that fact that we have a common currency. Our export markets are in Europe, two-thirds of those, mainly; two-thirds of those markets are in Europe. And it is therefore in our vested interests to have a stable euro.
And last year, too, we were able to see for ourselves: well, here the debt level is OK; in other countries it’s higher. So perhaps each and every one should do his or her own homework.
No, we have said, and the question of trying to prop up the currency and rendering it stable, that is something that needs the cooperation of all. And I think we are aware in Germany that the euro is very important and the strong euro is something that is a boon to us.
QUESTION: Madam Chancellor, the Greek Prime Minister said yesterday, as he had previously said repeatedly, there ought to be debt relief granted to his country. Do you think that there is a need to grant Greece debt relief through, for example, concessionary and lowering interest rates?
And Prime Minister a question addressed to you. We have heard that there is a lot of criticism as regards the competitiveness pact proposed by both Germany and France. Do you have problems with this as well?
MS. A. MERKEL: Well, we are always talking about this set of measures as one comprehensive package, and we now have a situation where the Greek support measures have a limited term of three years, and Ireland has the term of seven years outlined for its measures, and we are now currently thinking about this. But this can only ever be decided on in concert with all of the other measures, whether the maturity of the Greek package ought to be prolonged. That is one part of this overall package.
MR. G. PAPANDREOU: Let me give an answer to the previous question also. Concerning our debt and the sustainability of dealing with our debt, this is why we have a programme, a very difficult programme, but we are on track – we are delivering – to make the necessary reforms, to make the Greek economy viable, to make the Greek economy grow, to cut the deficit, and of course by cutting the deficit and by growing we will also be able to systematically cut the debt.
So I can very clearly say no, we are not going to put a burden on the German taxpayer. We have taken a loan; we are paying it back through interest, when the programme is over. And this for us is a question of credibility and creating the necessary trust amongst ourselves, with our partners in the European Union but also in the international economy. And these changes we will continue.
Of course, part of the problem in Greece was not only the debt and the deficit, but it was the fact that Greece was not a competitive economy. We were not a competitive economy. We were buying much more than we were selling, if you like, very simply.
And that is why many of the reforms we are making are to make this economy more competitive: opening up the professions, making it easier to invest, cutting the bureaucracy, making things more transparent, allowing for a tax system which is more effective and more clear, and of course allocating the public money in ways which is helping the viability of the economy and helping growth.
So I would say that many of the things, if not almost all the things that have been suggested in the Franco-German competitiveness pact, we have done already or we are implementing already.
I would add to this that for the competitiveness of Europe I believe that we need to invest also in quality. We will be competitive as we produce quality. Therefore innovation, therefore education, therefore the infrastructure to connect our single market directly through transportation, through energy grids, through the broadband investment. And of course green growth, a green economy, which we are investing in – Greece is becoming a green economy by investing in renewable energy – these are things which we believe will complement the competitiveness of Europe.
QUESTION: Prime Minister, before your visit a group of very well-known economists calculated, they did their sums, and they said that, in spite of all of the efforts, your government after 2013 will have a higher debt level than now, and that there will be an enormous difficulty then to refinance the capital markets. So do you think you can avoid a haircut, or do you think this can only be avoided by prolonging the programme, as the Chancellor hinted at?
MR. G. PAPANDREOU: We have made this whole programme, the whole programme is based on the premise that we can be credible in the market and credible to our creditors, and therefore not have a restructuring or a haircut.
Yes, the debt is going up because the deficit is still there, even though we have cut the deficit by six points. We still have a high deficit, which is around 9.5%, so we are cutting it down in the next years. And that will allow us to start then lowering the debt, as we have a primary surplus.
So this is part of the programme. We knew that the debt would rise before it goes down. And so there is nothing that is new in this, and this is part of the programme.
Of course, in a comprehensive package where we create a sense of security in Europe and the stability, I would say, particularly for the eurozone, for the viability of the euro, this will help the climate. And, of course, there are different ideas about how one manages debt in a way which does not, however, include haircuts.
QUESTION: Ms Merkel, I want to ask if there will be time overall solution to the problem of Europe. I say this because you know that even in Germany they heard voices that act more with an eye to the German domestic affairs, although you have a broader view on the future of Europe at this stage at least.
I would also like to ask the Greek Prime Minister, if what you said earlier that Ms Merkel, that remains to be many things yet, apparently suggesting that we should receive as government and other measures in Greece and in what direction should be. Thanks.
MS. A. MERKEL: So as to interpret myself, I have said that Greece is going to work further on the programme that has been agreed on. And this programme, after all, doesn’t end in January 2010 or 2011. And so I didn’t mean any further measures, but if I only looked at German interests, I would certainly not look so intensively into all of these issues.
Only because I am a committed European, because I know that we all depend on each other, that I know because if we are all doing well we will also have more prosperity for the people here in Germany and for the people in Greece, this is why I am thinking of how can we better keep within the rules of the Stability and Growth Pact and how can we get more stability for the eurozone.
So my interests are obviously those of Germany, but a German chancellor is always committed also to European objectives and interests. And I am doing those things because I am a committed European, because although we are a big economy and we are a country of 18 million people, with good economic data, we will not be able to go it alone.
And because many millions of Europeans, starting with the values that we all share, dignity of man, human rights, open trade, free trade and regulation of financial markets, environmental protection, climate change, we would not have any kind of say if we did not make the European voice heard. And this European voice can only be heard if all of the member states of the European Union work together. And this is why we work together. It’s part of my work, too. And this is why the consent of one is the consent of others as well. This is how it is in the Europe that is growing every closer together.
MR. G. PAPANDREOU: Well, I will just add to what Angela said. There are no extra measures. We have a very clear programme. And it is very detailed, actually, of what we must do.
But that does not mean that we do not have more to do. For example, we have to be more effective in fighting tax evasion. That is part of our programme. We want to do this. We have to do this in order to deal with our debt also and our deficit. We have to change our education system, major reforms. We have to make our health system much more efficient and much more transparent. We have to reorganise our agriculture, to make our agricultural products competitive. And we can be competitive. Greek agriculture has a unique position with the Greek and Mediterranean or Cretan diet.
We can make our tourism an even greater industry. It already is. The prospect for this year will be a much better prospect than last year, and there are new markets that are opening up and new possibilities for green tourism and agro-tourism and health tourism.
All these will be very important for our development, for our growth, and making sure that we are sustaining our being able to manage the debt issue.
I think also what is very important is to bring a feeling of truth, justice, social justice, and a sense of rule of law. We say in Greek ευνομία, rule of law, in Greece, which was launched over the past years. And I think this is very important for the cohesion of our society.
So yes, we are on track. There are no new measures, but there are measures which we think will make Greece viable, more just, more transparent and more competitive, and one which will allow for prosperity and jobs in Greece and for the Greek people. This of course is important for Europe.
And I would like to say that, because you mentioned about the impression that you had concerning Germany and the government. Last year, Angela, when we were here nobody really could have made a prophecy of what the developments would be. I think we all have learned that we are much more closely tied together in this European Union, and that our future is much more something we need to deal with by close cooperation.
And this is something that Angela has said again and again in the past months, and this is necessary for all of us to understand. Because in the end, this is not our weakness; this is our strength. I think we have great capabilities in Europe, and the more we are working together, the more we can, as Angela said, deal with major challenges. It could be the financial challenge; it could be the climate change challenge; it could be the food or the energy issues, the crises that may occur. It could be the challenge that we have now in Northern Africa and the Southern Mediterranean, the Maghreb and the Arab countries, to help them move towards democracy. This is where Europe has strength.
So I would again commend and express my appreciation for the work that Angela is doing to help create this new architecture for Europe to meet these many challenges we have together.
MS. A. MERKEL: Thank you.