I. A historic budget

The Budget for the fiscal year 2012 has been prepared, and shall be executed, at a critical juncture for Greece – critical because our actions today will decide the country’s economic future, not only for 2012 but the entire decade.

Indeed, this is a moment of immense national significance for our country. Both Greece and Europe are faced with the worst economic crisis in decades. Few generations in recent times have been called upon to deal with challenges of such critical importance for our nation. Circumstances demand that we transcend our limitations and surpass ourselves. We have to prove that we are one of those generations in Greek history that was able to succeed against overwhelming odds.

The 2012 Budget is a tough budget. It has to be executed within an economic environment that labours under a host of uncertainties. The Budget targets are ambitious. Greater still are the challenges in implementing the measures needed in many economic sectors. But we have to meet these targets, and we have to implement these measures. This is why we have to show determination and persistence in our endeavour. We have to work to the best of our ability and leverage our every strong point, in a spirit of cooperation. We cannot afford the luxury of bewailing our fate, nor can we continue the practice of exchanging mutual recriminations about the past – about who is, and who is not, to blame for our current plight. History will judge us harshly if, while waving our swords at the past, we abandon the struggle for the future.

The endeavour to implement fiscal consolidation and the restructuring of the economy, which will lay the foundation for sustainable and balanced growth, is nothing short of a national struggle whose success depends on the contribution of each and every one of us. This struggle transcends narrow party-political forces and dividing lines. The broad union of political forces achieved with the formation of this government of national unity needs to be backed by a truly concerted effort, on the part of us all, so as to ensure success.

By successfully executing the Budget Greece will meet its obligations to its lenders, restore the country’s international credibility, and create the basic conditions needed to overcome the crisis and rescue the economy. This will require steadfast efforts at a time of heightened uncertainty, and in a Europe – shaken by the crisis – that is seeking the next major step forward.

The Budget serves as the guide for the fiscal policy we must follow. It maps out targets and directions; it does not contain easy solutions that we agree today and forget tomorrow. The execution of the budget requires the motivation not only of the new unity government, but of all the social and political forces that support it. It requires us to maximize our shared interests and not allow our differences to divide us – these are of minor importance in the face of the challenge that lies ahead: to rescue this country. The citizens of this land will appreciate the genuine effort and contribution of all political forces. They will surely reward cooperation and responsible management.

The economic crisis that has gripped our country is no mere storm that will soon blow over. It will take time to pass because it is the product of imbalances that were exacerbated over many years through the accumulation of errors and omissions in policies that led to the creation of excessive debt. It is the result of a prolonged process of deferral of solutions, which, though serving short-term political ends, came at a terrible long-term cost for the economy and society.

Accordingly, the resolution of these problems will now take time and incur sacrifice. After four years of recession, this has become painfully obvious to everyone. Nevertheless, the positive impact of fiscal consolidation and structural adjustment will gradually become apparent: in economic growth, improvements in the real incomes of working people, and employment.

II. The key features and challenges of the 2012 Budget

The 2012 Budget serves the national goal of stabilizing and then rebooting the economy within an extremely sensitive and volatile European and global economic environment. The Budget is more than an exercise in regulating cash-flows and public finances. It serves the key objective and broader endeavour to restore the conditions for stability and growth in our economy. It encodes the necessity for both these things. We cannot have growth without stability. And we cannot secure stability if growth is not forthcoming. The Budget requires a long-term effort on the part of the current and future governments. This is reflected by the fact that, this year for the first time, the Budget targets for 2012 are consistent with the objectives of the Medium-Term Fiscal Strategy Plan for 2012-2015.

The 2012 Budget sets out a series of targets that are ambitious but achievable. The macroeconomic assumptions underlying it are modest and consistent with the projections of all the international organizations. The adjustment in the general government deficit derives, symmetrically, from revenues and expenditure. To illustrate, in 2012 revenues are forecast to increase by €4.5 billion while total spending will decrease by c.€5 billion.

The first key feature of the 2012 Budget is that, for the first time in recent years, the budget provides for a primary surplus, which is essential if we want to reverse the tide of rising debt. Although recession will persist in 2012, the Budget forecasts a primary surplus in the region of €2.2 billion, equivalent to [1.1%] of GDP. In other words, estimated government revenue will exceed primary expenditure (i.e. expenditure that does not include interest payments). The return to a primary budget surplus is an onerous, but not impossible, task. Achieving this goal, from 2011 to 2012, will require a €6.8 billion improvement in the general government primary balance, while over the course of the previous two years (2009 to 2011) the cumulative fiscal adjustment has been c. €20 billion. In the years to come, the primary surplus will need to increase further, so that the debt-to-GDP ratio can decrease to around 120% by 2020.

The projected increase in government revenues derives from both the increase in tax rates and changes in income tax. The shortcomings of the taxation system in Greece are a long-standing problem. Although the tax rates in Greece are no lower than in other European countries, our tax revenues as a percentage of GDP are well below the EU average. In 2010, tax revenues in Greece were c. 20% of GDP, compared with the OECD average of 25%. Indeed, according to EU data, the dramatic deterioration in tax revenues in Greece began long before the crisis. Cyclically adjusted revenues decreased from 35% of GDP in 2000 to 29% in 2009.

This situation reflects the major structural weaknesses of our taxation system: in the sphere of tax legislation, tax administration, the procedures for resolving tax disputes, and for punishing tax evaders. It has become clear that we need a multi-pronged approach in order to combat fraud effectively. Now is the time to put in place a comprehensive policy to deal with the phenomenon, which must then be applied to the letter in subsequent years. It is essential that we radically simplify taxation legislation by eliminating the manifold exceptions, exemptions, subsidies, and so on. Many of these arrangements were initially made in the name of social justice. And yet, the Greek taxation system presents a forest of injustices and gives rise to frustration on a daily basis.

Besides simplifying legislation, we must carry out a thorough restructuring of the tax collection apparatus, organize antiquated local tax offices and customs services on a new footing, and change tax inspection and auditing mechanisms. With the help of the Troika – particularly the IMF – new legislation has been drafted by the Ministry of Finance, which will be tabled before Parliament for approval. This is an important step forward in the effort to reduce tax evasion.

But the momentum must be maintained in the years ahead. The effort began with a series of measures that included the appointment of a public prosecutor for financial crime and a tax arbitrator, the launch of a dedicated tax revenue agency for large corporations, as well as various other measures. A good start has been made. Now we need to continue and follow up consistently on this groundwork, without backtracking.

Tax evasion is not only an economic problem. It is a profoundly social problem, and in Greece it has undermined public confidence in the wider public sector.

The fight against tax evasion will not only generate more – and dearly needed – income for the country. It will deepen the sense of fairness in the taxation system and restore public confidence in the state apparatus.

The other key challenge for the Budget as it unfolds is to ensure that strict controls are applied to spending. We all know of the wastefulness and mismanagement in the broader public sector. People also recognize that there is a need to strengthen spending on social cohesion, on enhancing education and health. Under current circumstances, the Budget cannot increase spending in these sectors. However, with the closure of various redundant agencies and organizations, the merger of others, and the rational management of available resources, it may be possible to increase the number and quality of services provided by the welfare system.

To streamline public administration we need to radically change the apparatus for monitoring and controlling public spending. The Finance Ministry has already put in place procedures for systematic controls. These must be intensified, run on an even more effective basis, and extended to cover all spending by both central government and local government and other public bodies.

I believe that when people are given tangible examples of effective government spending, and good public and social services, they will change their negative predisposition towards paying taxes. I understand the concerns of the average citizen, who has been asked to pay more taxes at a time when he sees his income declining, unemployment rising and the immediate economic outlook showing no improvement. But there are no easy solutions. We all have to play our part in helping the economy to avert the risk of becoming trapped in dead-end, and return to growth and prosperity.

A key component of 2012 Budget is the reduction in the debt-to-GDP ratio from 162% at the end of 2011 to 146% at the end of 2012, i.e. a debt reduction of c. €42 billion. This is the first reduction after a string of years where the constantly swelling public debt has succeeded in destabilizing the Greek economy. While the projected contraction in public debt in 2012 and the years thereafter will be due in part to the creation of primary surpluses, it largely reflects the PSI: the planned voluntary exchange of sovereign bonds by Greece’s private creditors.

This private sector involvement will serve to improve the sustainability of public debt.

A further key component of the 2012 Budget is that, for the first time, it includes detailed data on the general government, i.e. not only central government but also local authorities, hospitals, utilities and other public bodies. Accordingly, the public will know what money is flowing in and out of the various institutions and agencies of the general government, and precisely what these many public organizations spend. This is a first significant step towards achieving transparency in state income and expenditure, and will also enhance more efficient implementation of government policy. Our aspiration is to expand this effort by providing monthly reporting on the progress of the general government.

We want the taxpayer to know exactly how the taxes he or she pays are spent, and whether they are spent well.

The promotion of structural reforms and the implementation of the privatization programme are also important features of the Budget. In 2012, reforms in the health sector, the social insurance system (following assessment of supplementary pensions), the new taxation map of the country, the so-called closed professions, and the judiciary will be completed. Privatization will be pushed forward at a faster pace, not only so as to enhance state revenues but also to improve the efficiency of the organizations privatized, thereby giving a boost to economic activity.

The economic crisis has taken its toll on the public, with the sharp rise in unemployment and the decline in incomes. These problems cannot and should not be ignored. Yet the process of consolidation is absolutely necessary. The accumulation of excessive budget deficits over a succession of years led to the over-indebtedness of the government, resulting in the refusal of lenders to finance Greece at reasonable rates. At the end of 2011, Greek public debt corresponds to over €30,000 per capita. It is vitally important that the adverse growth trend of the debt be reversed. By restoring fiscal stability and credibility we shall return to an environment that is conducive to growth and employment.

An apt question is whether, in an environment of heightened uncertainty and weak economic activity, the Greek economy will be able to emerge from the anticipated recession in 2012. Although the uncertainties are great, there are a number of positive signs supporting the view that economic recovery will get off the ground in 2013.

First, exports have increased significantly and companies that are export-oriented have not been affected to such a degree by the economic downturn in
Greece.

Second, the decline in salaries and pensions is not expected to continue in 2013, nor the increase in tax rates, and accordingly disposable income and consumer spending will tend to stabilize.

Third, when various major projects, which have come to a standstill, are restarted and the absorption of National Strategic Reference Framework (NSRF) sources gains faster momentum, we shall see an increase in employment and an improvement in the investment climate. This will be boosted by the financing of major projects by the European Investment Bank and the technical assistance offered by our partners (a special Task Force has been set up) in reorganizing the public sector. In addition, the emergence of a more favourable business and investment environment, backed by a reduction in bureaucratic barriers, will stimulate entrepreneurship and private investment.

|II. We have a responsibility to lay the foundations for sustainable growth

The current fiscal clean-up is taking place in an environment that is far worse than anything we experienced in the previous two decades. The 1990s and 2000s were a period of global economic stability and growth, which would have eased the process of economic adjustment. Today’s financial crisis and concomitant uncertainty, as well as the generalized endeavour to push through fiscal consolidation elsewhere in Europe, have hit the incomes of our trading partners, thereby frustrating our efforts to return to growth by boosting exports. In such a climate, Greece is compelled to redouble its efforts to attain the magnitude of fiscal adjustment achieved in the 1990s.

Against this harsh background, we have to draw on our reserves of efficiency, determination and ingenuity. This is the only way we can offer a viable future to the next generation, which, though better skilled and qualified than ever, is now seeking a brighter future abroad.

Do we have the ability and the stamina for such a national effort? I believe we do, so long as the country’s political forces work together and society remains united. Given the scale of our problems, we shall need to continue our endeavours well beyond 2012. It will require hard work and perseverance by more governments. But, if we want, we could make this a decade that ultimately delivers positive results. How?

- if, by concerted actions and measures, we build a new economic and institutional framework that will place Greece in the community of advanced countries;

- if we evolve a new sustainable model of economic growth, investment and employment founded on an outward-looking orientation, producing competitive services and products;

- if, swiftly and methodically, we push through all the changes needed to unlock the untapped dynamism of the Greeks, the virtues and talents of the creative forces of this country.

The drive to implement economic reform is sometimes presented, in some quarters, as being dictated by our European partners and international organizations. This view, however, hardly does us justice. Fiscal consolidation and the reconstruction of our economy – with the support of our partners – are developments that are first and foremost to our benefit. We should therefore assume full responsibility for how we set our priorities, how we develop initiatives, and how effectively we implement the policies needed to revive the economic outlook of this country. It is important to realize that, in the last analysis, we are not under the surveillance of the Troika; rather, we are under the surveillance of History.

IV. We have a responsibility to remain within Europe

Greece is and will remain a member of the united Europe and the euro area. The Greeks will not drop this membership casually – after all, it is the nation’s most important post-war achievement. It provides us with conditions of greater security in matters of defence and the economy.

Let me stress: our place in Europe is not up for negotiation. The Greek people will defend it at any cost.

But we should remember that membership of the euro implies rules and obligations that we must steadfastly observe if we wish to enjoy the benefits of a global currency, and if we wish to depend on European solidarity. The crisis has revealed flaws in the structure and function of Economic and Monetary Union, flaws that contributed to the formidable sovereign debt crisis that is currently stalking the euro area. If they stick together, united in their resolve, the European nations will overcome this crisis.

But a requirement for our participation in the common European project is that we meet our national commitments, that we implement fiscal consolidation, and improve the competitiveness of our economy. In spite of the crisis, Europe and our common currency remain one of the greatest achievements of modern history. The ancient source of European political history, Greece is an integral participant in the joint project of ever closer European integration. Greece belongs in Europe, and Europe is unthinkable without Greece.

V. To sum up: We can do it

The crisis is taking its toll on Greek society. It is hitting jobs, denting real incomes, undermining aspirations. The exit from the crisis will not be easy; there are no short cuts. Anyone who suggests otherwise is not speaking from a position of responsibility. Economic recovery demands effort and sacrifices, national unity and mobilization of all the creative forces in the country.
Yet, the crisis presents us with a historic opportunity: the chance to turn a new leaf:

- To rebuild the state and our economy, placing them this time on solid fiscal foundations.

- To reinstate the rule of law, with institutions and rules that are respected and observed by all.

- To rid ourselves of the oligopolistic market structure, lack of transparency in dealings, and easy money that generates complacency, feeds corruption, and exacerbates inequalities.

- To turn our back on a culture of generalized tax evasion, and recover a sense of duty to one’s country, a desire to eliminate social injustice.

This crisis has taught us the hard way that errors and omissions come at a price, that prosperity does not consist in a house of cards and borrowed money.

Rather, it requires organization and continuity; it requires that we play by the rules; it requires hard, disciplined and productive work. Above all, we have learned that the first to suffer the impact of the crisis are the weakest. And this is why we must ensure that this never happens again, by reforming the state, by eliminating the deficits, by shifting to a competitive and outward-looking model of economic growth.

The government of national unity embodies the unity and determination of the Greek people in the face of the worst crisis in decades. It embodies the threefold historic responsibility of our generation:

- To pull Greece out of the spiral of recession;
- To consolidate the country’s place in Europe and the euro;
- To create the conditions needed to foster economic recovery and sustainable growth.

The 2012 Budget is yet another concerted step in this direction. It sets ambitious targets and implies considerable sacrifice. But remember, the sacrifices will be vindicated by the outcome.

I urge you to support these efforts and play your part in shaping the future of our land by voting for the 2012 Budget. Through national unity, hard work, and faith in the country’s potential, Greece will enjoy the brighter future she deserves. We can – and will – succeed.

I

1. The public discussion that took place in Parliament yesterday and today, at this highly critical juncture for the future of Greece, was certainly very useful for the people of this country. It was extremely useful for me personally and for the new unity government which, with your vote of confidence, will undertake the enormous task that lies before us.

2. I thank all those who support the government and who intend to provide it with their vote of confidence. In my view, each of these votes corresponds to a personal decision to undertake a burden of responsibility: to ensure that our country remains within the eurozone, and to ensure that the process of fiscal consolidation and reform of the Greek economy is continued.

3. I also thank those who, advancing specific arguments, have stated the reasons why they will not give a vote of confidence. I have listened carefully to their positions and I wish to assure them that, within the framework of the government’s policy to rescue the country, I take their concerns very seriously into consideration.

II

Honourable Members of Parliament,

4. When presenting to Parliament the government’s policy statement I stressed that there are two keys to winning the battle to rescue our country from the state into which it has fallen: explaining the truth of our situation and restoring confidence. The truth emerges from an accurate reading of developments and an understanding of the actual situation in which we find ourselves. Allow me to give you my reading of developments in the eurozone, the causes and nature of our economic plight, and the policy required to deal with it.

5. Several Members of this Parliament have expressed their concerns about the escalation of the crisis that has gripped the eurozone. Indeed, everyone is deeply worried, as the crisis spills over from the European periphery to the core economies. Furthermore, rising pressure in the government bond markets is having an adverse impact on the European banking system and, via the banking system, on the real economy. Particularly worrying is the negative chain reaction between the bond markets, public finance, bank lending and business activity. These developments are not only threatening the European economy with recession; they are placing stability in jeopardy.

6. What led to the expansion and the deepening of the crisis? First, the measures deployed in various countries that were vulnerable on account of their fiscal problems and structural weaknesses proved to be inadequate. Second, the European mechanisms set up to support the banking system and shield the economy from the crisis had neither the fire power nor the flexibility required to prevent contagion.

7. The escalation in the crisis over the past few weeks has led to doubts about the ability of the eurozone and its member states to deal with it. So much so, that some are making grim forecasts regarding the stability and the cohesion of the eurozone.

8. I am optimistic that the eurozone will prevail in the current ordeal. I believe that in the end, despite the divergences in approach to how the crisis can be solved, and despite the political and institutional factors that constrain freedom of movement in adopting the measures needed to deal effectively with it, the people of the member states of the eurozone and their leaders will surely take the right decisions. And they will adopt measures and an institutional framework that will safeguard the standing of the euro and protect the stability and solvency of the European banking system.

Despite the hurdles that lie before us on the national level, I believe that all the countries – great and small, strong and weak – share a mutual interest in securing the cohesion and stability of the eurozone. Because this will ensure the continuation of the European integration process by which the peace, prosperity and solidarity of the European peoples is consolidated.

10. To deal effectively with the crisis, we need more radical measures, including the strengthening of financial resources and room to manoeuvre by the European Financial Stability Facility (EFSF), a more watertight framework of economic governance within the eurozone, and real steps towards convergence and integration of the various member states’ fiscal policies.
Honourable Members of Parliament,

III

11. Time does not allow me to expand in greater detail on the subject. In any case, before formulating proposals on how to rescue the eurozone, it is both imperative and our duty to implement the right policies to rescue Greece, so that when the eurozone starts to emerge from the crisis Greece will still be numbered among its members. This must be our overriding objective.

12. What is the nature and basic cause of the debt crisis and, more generally, the banking and economic crisis in our country? The main cause is the accumulation of excessive public debt relative to the size of the economy, due to the persistently high budget deficits over a number of years. The continual accumulation of large budget deficits was not compatible with the monetary policy of the ECB, whose key mission is to maintain price stability. The combination of expansive fiscal policy and rates of inflation that for a number of years were consistently higher than the average rate of inflation in the eurozone led to loss of competitiveness, with adverse impacts on the balance of payments, business activity and employment.

13.The accumulation of excessive debt – both in the public and private sectors -is one of the main causes of all the crises to have hit advanced and developing economies throughout the ages. In the case of Greece in particular, the expansion of the public sector and the growth of the economy were founded, for a number of years, on borrowed money, and both proved to be unsustainable. Borrowing was, by and large, not used as a tool for financing productive investments, but instead used to meet the consumption of the government and the private sector. In other words, we failed to create the foundations on the basis of which we could repay the ever-burgeoning debt.

14. The global credit crunch served to show just how vulnerable the Greek economy really was, on account of its fiscal imbalances and loss of competitiveness. When the true scale of the problem was revealed in the autumn of 2009, the markets responded mercilessly and the cost of borrowing soared. Thereafter, doubts about Greece’s ability to implement the policies required to rein in the debt led interest rates to prohibitively high levels that rendered the public debt unsustainable. As a result, Greece had to request a bailout package from its European partners and the International Monetary Fund.

15. When presenting the government’s policy statement to Parliament, I outlined the reasons why, despite the significant progress made in reducing the budget deficit, the time when the country can raise funds on the global markets has necessarily been deferred to a later date. As a result, liquidity in the banking system has contracted and funding of the economy has become anaemic. It is clear that, despite the reduction in the deficit, the high and ever growing public debt and loss of competitiveness are the main obstacles to economic growth, the creation of new jobs and improved employment figures.

16. The basic causes of Greece’s economic woes are, unfortunately, homegrown – they are the product of policies, practices and mindsets that have been endemic over many years.

17. At the same time, however, it needs to be said that the excessive public debt reflects the inadequate workings of the economic policy framework of the eurozone and the failure of the capital markets to give effective early warning of real credit risks and to encourage timely implementation of tighter fiscal policy. For instance, the Stability & Development Pact failed to deliver ideal results and, as it turned out, was unable to anticipate and prevent fiscal derailment.

Although for a number of years prior to the crisis Greece, at the highest political levels, had been the recipient of repeated warnings by the European Commission, the EU Council of Ministers and the ECB on the need to implement responsible fiscal policy and to reduce the budget deficit in line with the terms of the Stability Pact, these warnings were ignored. Indeed, the deficit continued to grow and was, to some extent, concealed from view. Accordingly, it is essential that we adopt a new framework of economic governance in the eurozone, which in future will effectively preclude the creation of excessive budget deficits.

18.The policy of fiscal consolidation and reform implemented today is essential, given the scale of the errors made over the past years. Only by applying this policy can we free ourselves of the constraints that high public debt implies, and lay the foundations for a different type of growth that, above all, will be sustainable. Unfortunately, Greece is called upon to correct, within an extremely short space of time, the accumulated ills of many years. And this demands an immense effort and involves enormous adjustment costs for a period of time.

The costs of adjustment and the sacrifices of the Greek people must be distributed fairly. However, without fiscal reform we shall never manage to create the primary surpluses needed to enable us to reverse the rising course of the public debt and to raise funds from the global markets so as to finance sustainable growth and create new jobs. Without money our options are very limited.

19. By leveraging the comparative advantages of our country in sectors such as energy, tourism and agriculture, by introducing structural reforms that enhance our competitiveness

- that generate further competitive advantages and strengthen exports
- and by leveraging effectively the community funds released via the National Strategic Reference Framework, economic recovery and job creation will be achieved within a shorter space of time, thereby offsetting the adverse impact of the austerity measures. We must act quickly and methodically, in line with a specific strategy, mindful of the unemployed -particularly unemployed young people – so as to make the period of adjustment as short as possible and to ameliorate the side-effects.

20. When presenting the government’s policy statement to Parliament, I mentioned that regardless of whether we are members of the eurozone or not, our country’s economic problems remain the same. I stand by this view. However, I am sure that these economic problems will be even worse and their resolution even more difficult if Greece is not part of the eurozone. First, an exit from the euro and the adoption of a new, devalued national currency will lead to massive inflation, which would hit first and foremost the incomes of ordinary working people, particularly salaried employees and pensioners. Second, it will make it even more difficult to service the public debt, which is denominated in euro and which will have to be serviced by the government at the exchange rate of the new, devalued national currency. Third, Greek public and private sector assets will be available at fire-sale prices for all those who have funds in euro or other strong currencies. However, as I explained in my presentation of government policy to Parliament, membership of the eurozone implies significant benefits and facilitates adjustment of the economy, provided of course the right economic policy is pursued. However unpalatable, these are the hard facts of the matter. By understanding precisely our situation and the international context of our predicament we can better assess the policies required and set the right course for the national endeavour to restore the economy to health. But we should all take note that there are no easy solutions to be drawn out of a top hat.

ν

Honourable Members of Parliament,

21. As I have already pointed out, the task that the unity government is required to carry out is immense given the brief term of life assigned to it. For this reason, it would be wrong to expect too much of it. Implementation of the decisions taken at the eurozone summit meeting of 26th October and implementation of the policies associated with those decisions will facilitate the transition of the country to conditions of fiscal balance and sustainable growth. Thereafter, when greater stability and certainty have been restored, elections will be held so that the next government can continue the task of restructuring and reforming the economy.

22. Of course, if the peoples of Europe and international organizations are to continue financing our country, they will need more than the promise by the present, short-lived, unity government that it will carry out the task you have assigned to it. They will understandably require the express undertaking of the leaders of the parties comprising this government that they agree with the full implementation of the decisions taken on 26th October, and undertake the obligations that led to, and derive from, those decisions, as I described in my government policy statement to Parliament. Greece is asked to make this commitment for the simple reason that the Europeans and our institutional partners are also committing themselves to long-term financial support for our country.

VI

23. When, following the proposal of the three political leaders, the President of the

Hellenic Republic honoured me with the invitation to lead a unity government, I
accepted fully aware of the responsibility I was undertaking. The stakes are
enormous: will Greece remain a member of the eurozone, or will we be obliged
to leave?

23.1 firmly believe that, united, we can prevail:

- With the support of the Europeans and other peoples who have faith in our endeavour and who are investing in our success within the eurozone.
- Through the implementation of the policies and reforms required to restore the country to economic growth.
- With the mobilization of the Greek people in the national effort.
In this way, the sacrifices of the Greek people will not be wasted. On the contrary, they will shape the foundations for a brighter future. 24. We must enter the fray with confidence in our abilities, with determination, in a spirit of common purpose. If we fuel conflict and friction, particularly at this crucial juncture, we shall do ourselves no service.

24. The process of rescuing the country and overcoming the crisis is a process in which we all have to take part, a common goal requiring solidarity, understanding and mobilization. The road will not be easy. This is why I am not addressing my remarks solely to those of you who intend to give the unity government your vote of confidence. I also address my words to those of you who do not intend to give the government a vote of confidence, and I beg of you to bear with us: By all means, exercise your right and duty to criticize the government, but please do not reject the common endeavour.

Honourable Members of Parliament,

25.1 ask for your vote of confidence in the unity government.

Thank you.

The decision – arising from the deliberations chaired by the President of the Republic – of the leaders of the three parties supporting and participating in the present government represents a major step towards establishing the consensus and common purpose required to save the country: after a long and tense period of friction and uncertainty, the agreement between the three parties – Pasok, New Democracy and Laos – to form a unity government with a clear mission and mandate is of crucial importance for the attainment of key national objectives. Indeed, it sets the basis for:

- restoring the international credibility of the country,
- strengthening national and social cohesion, and
- meeting the obligations that Greece has undertaken in order to exit the crisis and revive the economy.

I am fully conscious of the honour that has been bestowed on me, as well as the responsibility that I now shoulder. I thank the President of the Republic for asking me to form a government, and I thank also the chairmen of the three participating parties for the trust they have placed in me.
The new unity government – and I personally – undertake the task we have been charged with at this crucial moment for four key reasons:

- Because Greece’s participation in the eurozone is at stake;
- Because by staying in the eurozone we safeguard monetary stability, we lay the foundations for sustainable economic growth, and we enhance social justice;
- Because young people must be given the chance to live and prosper in their home country, within an environment of stability, favourable job prospects, and equal treatment for all;
- Because I believe that, united, we can and will succeed.

How, then, are we to do this?

- By securing the solidarity of the European peoples and international organizations who have faith in our efforts, as demonstrated by the financial rescue package and technical assistance they have provided us;
- By implementing the policies and reforms required to restore the country to fiscal health and regain competitiveness;
- By mobilizing the Greek people in the national effort.

The very substantial sacrifices made by the Greek people must not be squandered. Two keys to winning the battle are: first, the truth and, second, restoration of confidence. By truth, I mean the truth about our current situation and where we are heading. And by confidence, I mean the confidence in our ability to overcome our problems. To secure the confidence of the international community we have to regain confidence in our own abilities.

The fiscal crisis that took hold of Greece two years ago has escalated and spread. It has evolved into:

- a banking, an economic, and a social crisis;
- a crisis of confidence among the Greek public in the ability of economic policy to address the country’s problems and map out a brighter future;
- a crisis of confidence among our European partners in the will and ability of Greece to push through fiscal reforms and restore its economy to health.

And all this is occurring despite the notable progress in restoring fiscal balance and the significant improvement in competitiveness posted since early 2010. Specifically, the general government deficit fell from 15.7% of GDP in 2009 to 10.6% of GDP in 2010, and is expected to decline further to 9% of GDP by the end of this year. Further, the international competitiveness of the Greek economy has improved significantly, as shown by the evolution of unit labour costs and, more generally, the cost of production, as well as a reading of other indicators that capture the qualitative and other components of competitiveness.

Yet despite the reduction in the fiscal deficit, the public debt is increasing because the general government deficit has not been sufficiently reined in.

Sufficient primary surpluses to help reduce the debt and reverse its upward trajectory have not been generated. The process of fiscal consolidation, cost cutting and increasing taxes, and the limited liquidity of the economy have all served to deepen – beyond the levels initially forecast – the recession that first gripped the economy at the end of 2008, due in part to the global financial crisis.

As a result, we have seen been a sharp rise in unemployment and additional difficulties in meeting budget targets. In response to these developments additional austerity measures were implemented to reduce the budget deficit. Social cohesion has been put under pressure. The Greek public has become increasingly dismayed and frustrated by the fact that, despite their sacrifices, the prospect of an effective exit from the crisis looks ever more remote.

In addition, high public debt (and expectations that it will climb yet further), the shortfalls in the fiscal targets and the delays in pushing through structural reforms mean that the day when Greece can raise funds from the global money markets to cover government borrowing requirements has been deferred to an even later date. Accordingly, if reform and restructuring of the economy are to continue, it is essential first to secure further rescue packages for Greece from its European partners and the IMF and, second, to implement a new economic adjustment programme that addresses the country’s fiscal problems more effectively and at a faster pace, while aiming at restoring, and then improving, our competitiveness.

To conclude, despite significant progress, Greece today finds itself at a critical juncture. The choices we make about the course to be followed and the policies to be pursued will be crucial for the future prosperity of the Greek people. The two alternative directions that the country can take, i.e. to remain within the eurozone or to leave it, have been stated in no uncertain terms by our European partners, who have also stressed their readiness to continue supporting our country, provided of course that Greece itself wishes to continue the economic consolidation and restructuring process.

The decisions taken at the summit meeting of eurozone leaders on 26th October, and the commitments which, on the one hand, led to these decisions and, on the other, derive from these decisions, set out the actions required to ensure financing to Greece in the years ahead and the successful outcome of the economic recovery effort.

Ill

The main task of this government, as agreed at the meeting of political leaders chaired by the President of the Republic on 10th November 2011, is the implementation of decisions taken by the eurozone summit on 26th October, and the implementation of the economic policy associated with these decisions. The government is called upon to guarantee that the respective commitments undertaken by the country are observed.

These commitments arise from the ongoing support programme; they also led to the more recent decision of 26th October, and derive from it, via the new rescue package and the involvement of the private sector (PSI) in the financing and long-term sustainability of the Greek sovereign debt. The Finance Ministry will manage the overall package of actions required for the implementation of our undertakings as per the adjustment programme.

More specifically, the decisions of 26th October concern:
1) additional financing for Greece totalling EUR 130 billion, covering our funding needs for the next three years, and
2) a new scheme for private sector involvement in the financing of the Greek state in the years ahead, leading to a significant decrease in the public debt, and a drastic reduction in the funding requirement for the public debt by 2020, while ensuring its long-term sustainability, bringing it to around 120% of GDP in 2020.

The sequence and timing of actions leading to the implementation of the decisions of 26th October are dependent on the agreements that associate our country with the eurozone member states and our institutional partners – the European Commission, the European Central Bank and the International Monetary Fund.

Once these decisions and the economic policy associated with them are implemented, Greece will be able to look to the future with greater optimism.
It is important to note that measures capable of leading to attainment of the fiscal targets set for the end of 2012 have already been taken and put into effect.
In the meantime, effective implementation of PSI means that:

- First, interest payments on the public debt will decline sharply in 2012, leading to further reductions in the fiscal deficit.
- Second, during the last two years of the new consolidation programme (2013 and 2014) under the Medium-Term Fiscal Strategy Programme, the need to take yet further measures will be reduced.

The task at hand for the present government is immense, given the brief term of life assigned to it. This is why we must get started immediately, and move at a rapid pace.

Our first priority is the immediate fulfilment of the conditions that will* enable timely disbursement of the sixth tranche of the original loan. The release of this tranche needs to be made no later than 15th December, in view of the government’s financial needs in the second half of the month. The legislative and administrative conditions for disbursement have been fulfilled by the country, thanks to the implementation, by the previous government, of all the required actions.

It remains for us to enact the undertakings that led to the decision of 26th October, and which derive from that decision.

The second priority for the new government is the completion of discussions with the troika on the new programme, on the basis of the fifth review of the original programme that was completed a few weeks ago. Following adoption of this new programme, the new loan agreement will be drawn up and then submitted to Parliament for ratification before the end of this year. The agreement must also be ratified by the parliaments of all those other member states whose various constitutions require such ratification.

Another urgent task for this government, of course, is the preparation of the budget for 2012 within the deadline set by the Constitution. Already, the budget is in its final stage of preparation by the economic team under Deputy Prime Minister and Minister of Finance, Mr. Evangelos Venizelos. The new draft budget will include an initial assessment of the beneficial impact of PSI.

The budget for 2012 shall be included in the revised Medium-Term Financial Strategy Programme, which comprises the cornerstone of both the existing and the new support programme.

Preparations for the planned bond swap under PSI are already under way so as to map out the financial and fiscal framework that needs to be in place by the time the new programme is approved and scheduled, and the holders of Greek sovereign debt are approached. Accordingly, we shall publish forthwith the global public announcement of the PSI, as per the Eurogroup decision of 7th November 2011.

IV

At the same time, we also need to ensure – in collaboration with the European Financial Stability Fund (EFSF) and the ECB – the liquidity of the Greek banking system during the implementation phase of the new PSI.
An immediate priority for this government is the approval of the bill ratifying legislation regulating issues related to Greek government guarantees to banks.

Alongside its core mission, under the Constitution the government is charged with formulating and running the general policy of the country in all spheres.

For example, the government will pursue the structural changes required to improve competitiveness and enhance the productive potential of the Greek economy.

The implementation of critical structural changes that are governed by national legislation needs to be rapid and effective. These changes include:

- the new uniform payroll frame;
- labour reserve measures;
- labour market reforms;
- the privatization programme;
- completion of measures to open up closed-shop professions;
- reforms in the workings of the judicial system;
- evaluation and restructuring of bodies, staff and services in public administration and the broader public sector;
- improving the business environment and enhancing healthy competition.

With regard to structural reforms in the labour market, the key priorities include: enhancing active employment policies; ensuring the sustainability of pension funds; supporting economically disadvantaged groups. No less than 24 new job creation schemes are scheduled for activation by the end of the year.

The new Single Agency for the Provision of Primary Healthcare is in the process of being launched. The crucial project of setting up the national electronic prescription system is moving ahead at a rapid pace.

The government is currently pursuing further reductions in the prices of medicines, reductions in pharmacy profits, and consolidation of the implementation of liberalized opening hours for pharmacies. An additional aim is to reduce the cost of procurement costs of hospitals, medicines and other materials compared with 2010.

The implementation of a national strategy to boost exports is particularly important and efforts are being made to accelerate it. A new bill has been drafted to streamline export procedures. Funds available for supporting the working capital needs of export businesses are being enhanced, at favourable interest rates. In addition, a further 20 plans to attract large foreign investments totalling EUR 5.5 billion are currently being evaluated under fast track procedures.

The restructuring and strengthening of the National Strategic Reference Framework (NSRF) so as to bring it into line with current needs and thereby channel funds more effectively to the country’s development priorities is another measure being promoted by the government. In the months ahead, substantial sums from the NSRF’s EUR 14 billion fund will be released to help finance the completion of major infrastructure projects and enhance the liquidity of businesses.

The privatization programme is progressing in line with the fifth review of the support programme. The challenge now is to attract investors.

It is particularly important that the country’s energy resources are put to good use. International tenders have been announced for conducting oil and gas exploration in the Ionian Sea and southern Crete. At the same time, the government is promoting plans to export the country’s solar energy resources to Northern Europe in line with the decision taken at the summit meeting of 26th October.

An action plan is currently being drawn up in collaboration with the new European Task Force for the reform of public administration and reductions in paperwork, both of which are essential if the country is to foster greater investment activity.

We shall focus on drastically reducing waste and closing down unnecessary bodies and agencies.

More efficient government administration and public services, greater transparency, equal treatment for all, and the strengthening of institutions are all of paramount importance. To this end, a bill is being drafted for the transformation of the Greek administrative model to that of a strategically focused and streamlined state. Also, a bill has been drafted for the reform of the disciplinary regime applicable to public service workers, and is now due to be submitted for discussion in Parliament.

Reforms will also be made across the entire spectrum of the administrative, civil and criminal justice systems. At the same time, alternative forms of dispute resolution will be strengthened so that the public will at last be able to find justice within a reasonable space of time.

Improving the educational system is essential if the country is to tap effectively its human and productive resources. Streamlining of the hundreds of regional administrative structures in primary and secondary education is already under way. Implementation of the Higher Education Act is a popular imperative, as reflected in the very broad support it received from the vast majority of MPs. The government will also take steps to restructure the country’s research profile.

Last, it is important that we implement forthwith the Lifelong Education programme.

In the area of tax policy and the management of public finance, the primary objective is the immediate and effective introduction of the new structures that have been decided, and the implementation of the findings of the reports prepared by technical experts of the IMF so as to tackle effectively tax evasion.

Honourable Members of Parliament,

It is my hope that the time during which this government is responsible for the management of public affairs will be more than a mere parenthesis. Rather, it is my hope that it serve as the bridge that facilitates the transition of our country to a state of fiscal balance and sustainable growth.

Our European partners and the international organizations that are supporting us have made it clear that the continued funding of Greece will depend on full implementation of the decisions of the eurozone summit of 26th October and the economic policies that go hand in hand with those decisions. To this end, they have asked for the commitment of the government and the leaders of the parties that form it.

This requirement should not be interpreted as the demand of faceless powers and organizations. We need to appreciate its true dimensions. The commitment they are seeking is a requirement and expectation of the peoples and taxpayers of the states which, either directly or indirectly, support us, and who are undertaking the risks and contingent liabilities that will arise if we fail to deliver on fiscal consolidation and restructuring of the economy. The pursuit of policies that aim at achieving these ends is first and foremost in our own national interest; however, it is also an obligation towards those other peoples who are showing us solidarity.

Honourable Members of Parliament,

It is true that the crisis and concomitant austerity measures have deepened the recession and hit employment over and above the levels originally estimated. These undesirable developments, however, can be countered and gradually eliminated in three ways:

- By promoting the reforms I outlined above, so as to improve competitiveness, enhance the country’s productive potential, and support an outward-looking economy.
- By using more effectively Community funds through the NSRF.
- By fast-tracking investments in energy, and particularly renewable energy.

These actions will help to absorb unemployment. Furthermore, we must provide a strong safety net for those who are socially more vulnerable. We need to support them with policies and stronger social solidarity by every available means. I believe that in the storm of this crisis none of us should feel alone.

The Greek people know that the course we have to tread is uphill, and that our efforts will require persistence. The exit from the crisis, under the best possible terms, and a return to growth and full employment, will not be forthcoming without sacrifice and without the associated cost of adjustment. These costs and sacrifices, however, must 6 be distributed fairly. Broadening the tax base and eliminating tax evasion are not only fiscal consolidation measures; they are also measures of social justice.

I should stress that uur endeavour to achieve fiscal consolidation and economic restructuring is made easier – not harder – by Greece’s membership of the euro area, which serves as a guarantee for monetary stability and fosters the right conditions for sustainable economic growth. In addition, the single currency assists in the European integration process and reinforces cohesion and solidarity among European nations. Remaining in the euro is our only option. The Greek public are fully aware of the benefits arising from membership of the euro area – as evidenced by all the opinion polls.

Honourable Members of Parliament,

If we stick to our commitments and are systematic in our efforts throughout the term of this transitional government and the subsequent government that is elected by the Greek people, the positive results we are striving for will start to materialize.

There is no denying that the road ahead is far from easy. But the time will come when our current hardships will take a turn for the better. The time will come when economic recession will return to growth, when the state will function better, when our collective efforts and social solidarity will be rewarded. The agreement of 26th October provides us with the best opportunity to reverse the current adverse climate, at least insofar as our own actions can impact it.

This crisis can be turned into an opportunity. All that is needed is for us to try our best. I call upon all those who work in the public sector – everyone in the nation’s tax offices, schools, public services – to do their very best to prevent their sacrifices from going to waste; for their efforts are crucial to the success of our common endeavour. The contribution of each one of us may seem meagre; however, combined with the efforts of everyone else it amounts to immense social and economic progress.

In a spirit of common purpose and social unity it is possible to deal with the crisis at greater speed and at lower cost to all. We can prove that we are capable of changing the country and shaping a brighter future, especially for young people. It’s up to us. We have the potential. Together, conscious of the difficulties that lie ahead, but with a clear objective, in a spirit of determination and systematic endeavour, I believe that we can succeed.

Allow me, then, to conclude:

I undertake the office of head of government at this most difficult hour in the recent history of our country. I am fully conscious of the great responsibility this entails. However, I cannot carry out this mission alone.

Emergencies of the kind that Greece now faces can only be confronted effectively when all the nation’s forces and potential are united and work together. I believe that by giving this government a vote of confidence you will be joining in this effort.

I am sure that no one here wants to see our country defeated and leave the euro.

I take it that all those who support the government undertake responsibility for ensuring that Greece’s membership of the eurozone is not up for negotiation.

The country can be saved. It depends on us.

Let me be quite clear to you and the Greek people. As long as the Hellenic Parliament entrusts me with the office of Prime Minister I shall perform my duties solely in the interests of our country.

Honourable Members of Parliament,

I ask for your vote of confidence in the unity government.

Thank you.

            I have delayed somewhat because I wanted to listen to what the opposition would say.  I will refer to what they said, though I think that probably our decisions have proved to be justified.  The opposition has taken a major decision to support the package.

First of all, dear Colleagues, every time we meet we note how dramatic things are, and that is true for today’s meeting too.

Let us look at what is at stake here.

I heard that yesterday our partners expressed surprise.  I do not understand why they were surprised- I simply do not understand why there was any surprise at all.  I was surprised that there was any surprise.

At one point in time, I and many others had said that what was at stake was our participation in the euro.  This was not an issue raised by us but is up for discussion due to circumstances.  Those who do not understand this call us ‘blackmailers’ and say that we are raising dilemmas that do not exist.

Yesterday’s events are simply a confirmation of what we were saying and nothing more.  What is really at stake here?  At the moment, it is the decision taken on the 26th October, and all the decisions taken recently, due to the enormous deficit problem and our sovereign debt in 2009.

The only way for us to stay in the euro, through negotiations of course, both internally and externally, is to faithfully implement the specific decisions.  We took decisions the day before yesterday that are beneficial for the country.  I will refer to these also.

In my reference to a referendum recently which unleashed a public debate internationally, there was another beneficial factor: we saw some indication, a foretaste of what it means to have saved the country and what it would have meant if we had not saved the country.  This was a foretaste simply.  We should fully understand the situation; every Greek citizen should understand that we are speaking in all sincerity.  We may not have been as bombastic perhaps as some like us to be, but we were sincere.

We also saw the international reactions to our decisions, within Greece and on the world markets.

How are we to deal with the issue of faithfully implementing the decisions of the 26th October?  I think that we are all concerned about the difficulties but the incidents of the 28th October in Greece was the culmination that made us look ridiculous in the Eurozone and internationally, giving the impression of a total lack of seriousness and understanding, instigated by groups acting to the detriment of our national interests– even though they were holding the national flag.

Our partners have expressed their bewilderment at the reactions of these people in our country after difficult but beneficial negotiations for Greece.

I am not referring to small groups which may ultimately exist in any country and who might have extreme views and act more or less irresponsibly, but I am referring to political parties.  With all the political parties reacting and denouncing the Government in no uncertain terms! I have stressed so many times that we need the broadest possible support.

We have felt the constant pressure of public opinion in trying to do things that have never been done in this country and to implement policies which are beneficial, even though there may be a difference of opinion on the details – still they are beneficial in their general thrust.

As to the referendum- first of all I consider that a referendum is the decisive and categorical answer to all those scenarios both inside and outside of Greece which talk of abnormality or of exiting the euro.  I must make it clear to all that I have every faith in the wisdom and maturity of the Greek people, much more so than in the present political system.

I am not condemning the political system in general.  What we know is an established political system.  Counter to this are the citizens, without any romantic allusions.  I believe firmly in Democracy and this will never change as a principle that I hold, and I believe is firmly rooted in our political movement, with deep political and cultural roots in our country.

Despite the prevailing problems of certain systems, as soon as we mentioned the referendum, it was the first time for many years that citizens felt that we were taking them into account and enabling their voice to be heard and that we trust their judgement.  We believe in people’s ability to judge correctly with the correct information to hand of course.

As for our partners, they recognise our right to a referendum. Of course, as I said in the Cabinet meeting they would like everything to be calm, simple and without referenda.

As to the subject of the referendum, this was not for them to set.  This is non-negotiable for us. They explained that they would then interpret the result.

Of course we will never, as Vangelis Venizelos said earlier have made our participation in the euro a subject of the referendum.  Our participation in the euro goes without saying.  If we do not however meet up to our obligations, then the issue of the euro is of necessity up for debate. Our referendum issue would have been the 26th October agreement.  This is a beneficial package with many issues and of course commitments attached.

We said yesterday that this package will be the basic issue for the referendum, which of course is our guarantee for participation in the euro.  Rejection of this package will for our partners signify the beginning of our exit from the euro.  In the meeting somebody mentioned the fact that ‘if you leave the euro, it does not mean that you leave for ever – you will leave for ten years and then we will discuss matters again’.

The final result of rejecting the 26th October package, either by referendum, either by elections, or through parliament, or due to not being able to implement it, – would mean leaving the euro.

The non-implementation of the package would mean, quite simply, ‘out of the euro’, we must comprehend this and make it known to all.  I believe that we have understood this.  It is not the referendum, as some would say, that is at fault for this situation, it was the impossibility of implementing the package.

As to the negotiation, because there have been discussions as to a renegotiation, I believe that our answer to our partners was clear yesterday.  It was crystal-clear.  We negotiated. What do they mean by ‘renegotiation’? We are constantly negotiating.

How great a renegotiation should we have?  Has there ever been such an enormous package negotiated over the past decades for our country?  I remember us celebrating because we were to receive 20 billion for the CSF!

First of all, if all goes well the debt will be reduced by 100 billion.  This is a huge package, unprecedented the world over.  A second package, of 240 billion euros in total, over and above the write-off of debt is due.  There are EU funds, on the basis of new conditions, capitalisation of banks, and mobilisation of our partners for investments in Greece – and these are all tools we must put to good use.

The discussions over the past few days here in Greece have been a revelation.  For the first time in two years it has been impossible not to step up to the demands of the day.  Those who accused us of ‘giving in’ are now begging us to vote and to show that we are responsible patriots!

Who is afraid of citizens now? Even those who formally were seeking a referendum do not dare to mention it.  We do not however fear the people.

I do of course understand the moral difficulties that our members have as to the result of such a referendum.  Even this minor doubt means that the result of the referendum will be watered down.

What, however, are the alternatives.

A national salvation government: so far we have been a government of national salvation, going it alone.  For two years we have fought by ourselves but can we last I wonder.

Will our parliamentary group last? There have been insults and heckling, so I ask can we stand it?  We can because we will carry this cross even though they cast stones as well as criticising us.

I fully feel and understand the difficulties you are all facing as members of parliament and if you think that you can proceed without solutions or referenda or broad consensus then let’s go it alone.

I have the feeling however that these two solutions exist.  There is always the option of elections of course, but this would mean a greater danger of default and exit from the euro.

At least a referendum has many chances of sending a very positive message.  I would not like to have it on my conscience and to regret that we did not go to a referendum and then find ourselves outside of the euro, because the Greek people did not have its say, and because we could not implement the beneficial decisions due to the reactions of some groups.

This is not of interest to our partners; however, they are not interested in who is to blame.  Greece is to blame; it is not Samaras, nor Papandreou, not this group, nor the other.

They would like us to meet up to our commitments and they guarantee the implementation of the agreements which are beneficial to the country.  Irrespective of disagreements or agreements on ideological issues, we cannot doubt that they desire the success of our country.

So we have dilemma –true consensus or referendum.  As I said yesterday coming out of the meeting if there were consensus we would not a referendum.  In the meeting this was stressed repeatedly.  I said that ‘if the opposition comes to the table to agree on the agreement we do not need a referendum’.  I also said that elections would be a third, though harmful solution.

You too have heard the statement by Samaras.  I think that first of all we should welcome the fact that the New Democracy party will vote for the loan agreement.  This is a major achievement I believe.  I am not going to comment on previous moves by the opposition, what has been lost or what where the country now finds itself, – we can do this amongst ourselves

The basic fact is that the ND party will vote for the new loan agreement and I would add that in view of the negotiations ahead of us we should re-discuss its participation in this effort too.

Certain conditions have now been set down – a transitional government, elections, etc. This is an issue we should discuss together, not something we should a priori adopt or reject, because it is still a general statement with a number of contradictions.

What would a ‘transitional government’ entail? What does ‘we go to elections but this parliament will vote for the package’ mean?  When will these elections be held, if elections are held, and for what purpose? We will discuss all this later.  Here we have said that we will vote in order for the country not to be dragged either to a referendum or to elections.

I at least am content, even if we do not go to a referendum, which was never an end in itself, if by all this discussion many have seen the logic at least.

The real problem however still remains, we have not avoided the swirl.  Even if some form of collaboration is achieved we must understand that the real problem remains.   The discussion, on the other hand, will be done with sincerity and on the basis of the national interest.

What is at stake is the move on with the broadest possible consensus in implementing a programme that is beneficial for Greece.  This issue is a political one, not one of procedure, it is profoundly political.

On this basis I propose that we appoint Dimitris Reppas and Nikos Athanasakis to discuss with respective cadres in the New Democracy party.  I too will discuss with Samaras to see what the next steps will be, on the basis of a broader consensus.  All will have their say of course and we will shape our proposals.

I think that today is a truly historic moment where the political parties have been able to agree on issues of major importance without conflict.

What this means for us we will see, but I think that we are here to serve our country above anything else.

Dear Colleagues, President,

We know that our country has been waging a titanic battle over the past two years.  Citizens are making a super-human effort.  With great endeavour, difficulties, political and personal cost we have all done our patriotic duty.

For two years now, once it became known what we inherited as a government, our country and society have entered a long tunnel of tribulations.  Our intention is to come out of this better and stronger. We have been constantly on the go trying to keep Greece on its feet and we are proud of this.  We are proud for what we have achieved and what we are achieving every day, despite the fact that public finances were due to collapse, despite having a clientelist state in dissolution and an international context which is fluid, where markets are uncontrolled with fear and speculation holding sway.

At the same time we have Europe with its own doubt, difficulties and set views.  We have public dialogue swamped by the facile exploitation of pain instead of fertile dialogue.  Most of the political world is unable or unwilling to accept the fact that it must change, nor to recognise the seriousness of the situation.

This is the situation and it is within this context that we are waging a battle as a country the past two years.  Despite the difficulties, despite the crushing criticism, despite the folly of the situation, despite the unfair reaction of powerful, organised vested interest groups who dominant the economy and the state.

We have been able as a Pasok government and parliamentary group, by ignoring the sirens, the populist jargon, (with the loss of those unable to endure the situation), to avert default first and foremost.  We have saved the Greeks from having to live through this nightmare of a national default.  What we have achieved is continued financing for wages and salaries by the establishment of a support mechanism which did not exist. We have proceeded to a huge, unprecedented reform programme so that our country can change once and for all, for us to be able to face the future and forthcoming changes with new provisions.

We have struggled hard to come to an agreement of paramount importance for the future of our country to ensure considerable relief from the burden of the past and which opens up a great window of opportunity for the future.

Dear Colleagues,

In this special situation we find ourselves after the 2009 elections it has been our primary obligation to avoid default.  Spearheaded by me we have all undertaken the responsibility to find the finances to avoid the collapse of the country.

This was our first goal.  It was not what we expected prior to the elections and nobody could have foreseen it.  We did however undertake to the full, the responsibility of this huge burden and we succeeded.

First of all with the agreement of May 2010 – this ensured us the first and largest package worldwide – 110 billion euros.

Our second goal was to improve gradually the terms of the agreement, based on the credibility the country gains by the painful efforts undertaken by all society.  We have been the guinea-pig, it is true. This was the first time that this situation has arisen in a developed country such as Greece and in a Single Monetary Union, such as the Eurozone.  In this experimental stage of course we have paid dearly, learnt much, but negotiated much.

At the March Summit we were able to achieve a very important reduction to our debt, though it remained enormous and difficult to repay without strangling Greece for years.

This is why as concerns our debt we wanted to reduce the burden on our citizens.  We achieved this in July and then with the 26th October agreement, a few days ago, which complemented and then positively exceeded by far the decisions of July.

I repeat very briefly something I have said many times, but which is often lost in the tumult of other discussions, that the 26th October agreement achieved in the European Council is a milestone for this country and opens up new prospects.

Many tried at the beginning to belittle it, each for their own reasons.  But the true importance for the country is proven today.  As each day goes by it becomes apparent how decisive and historically important this is for Greece.

Our concern in this negotiation which was difficult is for the position of our country in the euro not to be called into question.

Secondly, we tried to remove the dangers and to protect the assets of citizens so that they do not lose one euro of their savings.

Thirdly, we wanted to facilitate decisively our effort to overcome the crisis more quickly and less painfully so that we could proceed to development.  All three goals have been achieved.

This agreement not only confirms our position within the hard core of the euro, but also strengthens our ability and gives us fresh supplies to rebuild our future on better and stronger bases and for us to stand on our own feet with our own strength.

When the agreement is implemented it will signify the end of a period of great anxiety and insecurity that our citizens have been through. – Anxiety in trying to keep afloat, anxiety as to people’s savings and the prospects for the young generation. Now a new era has opened up which is difficult but more certain, more creative and more promising.

I remind you that the implementation of this agreement means that we will have a new package available to us of 130 billion euros, the largest ever in the world.  It will cover the needs of our economy and state, underpinned by better financing conditions possible, better than the first programme and than other countries in a better position than we are.

In the European Council we achieved an agreement of decisive importance for the future in an effort to write-off a large part of our excessive debt.  We were able to achieve a 50% write-off of debt, the object of course of negotiations ahead of us.  This debt is in the hands of private individuals, holders of Greek bonds, chiefly of the banks.

100 billion can be subtracted from our debt burden in the forthcoming months, which is almost half of the wealth we can generate in one year.  This cost is taken over by the banks, both Greek and foreign.  This would achieve something that is at the heart of our movement – a more equitable and just distribution of the burden.

This is also an act of social justice, especially as our citizens were constantly asking quite justifiably why he should shoulder the burden alone and moreover a burden for which he was not responsible.

For the first time in our country the debt will be reduced directly, in absolute terms, instead of increasing as in the past every year.   This is not a theoretical or abstract achievement.  It is immediate and therefore concerns the life of our citizens for many years to come.

Simply by reducing the total debt we will have lower interest rates, a longer period of repayment, a longer grace period,- and far less interest will be paid.  According to the estimates of our institutional partners, next year we will reduce interest repayments by 5 billion euros. This is approximately the cost of all the measures in the multiple law

that we voted on, so you fully understand the importance here.  This has been a tremendous saving which came out of the reserves of each family through taxation, so this will come as a huge relief.

I am not saying that all is rosy but it is certainly a greet contribution for the Greek people.  When we started this super-human effort we undertook a basic commitment to our citizens that their sacrifices would not be in vain.  These have been difficult sacrifices but have not been in vain, they have taken root as a new basis for the future of the country.

We have honoured this commitment therefore.  This write-off of debt alone is much greater than the sacrifices we are called upon to make or have made already.

Consequently this is a clear vindication of citizens’ efforts, and of all of us, for what we have been through and are still going through, – all the difficulties with votes of confidence, standing our ground, threats and much more.

It is recognition of our policies and our common efforts; it a proof also of the robustness of our society.  I do not know of other societies, such as Greece, which within a democratic framework can endure such a burden in so short a space of time.

It is a recognition and proof for ourselves which gives us courage and shows that we have the will and the unbroken unity to achieve miracles and that we have a productive phase ahead of us.

As I said the agreement does not apply to the indefinite future, to 2020.  Already we are aspiring to saving time.  This was also part of the negotiations – for us to weather the stormy sea now which is the greatest difficulty. When things will be better for our country, it will also be much easier, but today it is difficult for citizens and for the country.  This was recognised, negotiated and we succeeded.

In practical terms this changed the budget data.  We will soon be submitting the 2012 budget, but the data for calculation to be negotiated for 2013 and 2014 are changing which will give us a huge breathing space.  The Deputy Prime Minister, Vangelis Venizelos will be saying a few words on these prospects.

This means that with a manageable debt and without excessive interests payments strangling us, new prospects open up for growth.  The issue is not only one of whether the money is sufficient for growth, but where the money is going and where it will be invested.  This has always been our condition and objective, everything must be on the basis of the public and common benefit for growth which will take us to another qualitative and green growth.

The agreements of the 26th was concluded and thereafter the 27th October, with tragic scenes in our country. These are scenes which do us dishonour as a country, but also harm us.  Somebody may carry the Greek flag, but whether he honours it or not is a different matter.

You all heard the statements by our partners yesterday.  I heard that many were surprised at these statements.  In addition to the tone and content, telling us ‘how to hold the referendum’, on which we were very clear, I do not understand their surprise.

First of all I clarify that the decision to hold the referendum or not was and is our own decision, the decision of the sovereign government.  We took this decision.  They of course knew that it had possibly been discussed publicly as well, but it was our own decision.

We may have an economy under tutelage, but democratic procedures and institutions are a matter for the Greek people only.  I have made this absolutely clear repeatedly, both in the past when the issue of removing the right of each country to vote was on the programme, but also in discussions we had on the referendum.

But to come to the heart of the matter why are we surprised with what they said? I am not at all surprised.  What I and many cadres had said is that what is at stake is our participation in the euro.  Yesterday was just a confirmation of what we had said.  To be more specific tantamount are the decision of the 26th October.  All the decisions however that we have taken recently within this painful and difficult programme which will change Greece after the major perturbations to our country due to deficits and debt, all these decisions are our obligation to stay within the euro quite simply.

The only way to stay in the euro, with negotiations of course and with consultation with society is the true implementation of our decisions, of common decisions taken by us and our partners.

We took decision on the 26th and 27th October which are most beneficial for our country despite the difficulties.  We decided to propose a referendum and a world public debate broke out, but there is another beneficial element for us:  we received an idea of what it means to save the country and what it means not to have saved the country. But this was just a foretaste.

We must understand this. This is the reality.  Whether we like it or not, whether it is just or not, this is the reality. We must manage this reality.  We are managing this reality in the best possible way in the interests of the Greek people and our nation.

This must be understood by all Greeks because much has been said about how we found ourselves in this position, who is to blame, which magical solutions might be found.  We are being absolutely sincere in what we say.  Perhaps some would like us to express this sincerity in another way.

We also saw the international repercussions that our decisions might have, the reactions towards Greece from the world financial system.  This should be the subject of serious discussion in the G20 meeting today and tomorrow because after 2008 decisions taken  and recommendations made must be implemented.

Ultimately it must be the people that decide and not the markets.  You cannot have the states needing to collect taxes and at the same time to have a world banking system which allows tax evasion and tax havens.

We cannot have a banking system which pays far less in taxes than paid by workers – here I am referring to the financial transactions tax.  The Rating Agencies cannot have greater power than parliaments.  I could go on further.

It is imperative for the G20 to understand its responsibility it also has in terms of international financial governance, the environment, migration and poverty.

How is the 26th October agreement to be implemented faithfully?  We have all been concerned recently and hence the discussion on initiatives and on how to proceed.

I think that the 28th October incidents were the culmination of the phenomena observed, which unfortunately made us look ridiculous in the Eurozone and internationally giving the impression that there is a total lack of seriousness and understanding because these individuals acted against the interests of the country.

It was also inconceivable for our partners, and of course they said so yesterday, that after such a difficult and tough negotiation over so many months up to the 27th October, that the reaction of Greece should express full opposition.

I am not referring to the small groups or individual citizens who might feel the need top express their anger.  I am referring to parties and their leadership. They all in one way or another denounced the beneficial agreement.  The leaders commented yesterday -’we have never seen a country having its debt cut by 50% and protesting’!

All the parties protested against the government and accused us of anti-patriotism.

All these events are worrying because we need shape a broad consensus among the Greek people within the parties and social partners as well.

We are doing things that are of historical importance.  What has been done in our country is unprecedented but truly beneficial and even with certain disagreements for certain issues, we are moving in the direction of huge reforms and change to the benefit of citizens and the viability of our country.

This is why we proposed the referendum as the solution which could shape social alliances and a clear decision by the Greek people in favour of the decisions of the 26th October.

On the referendum I want to say that it is a decisive and clear answer, if the answer is yes, of course, to all the scenarios under way in this country and abroad, either towards abnormality or our exit from the euro,

I would like to have an answer on this too.  I have every confidence in the wisdom and maturity of the Greek citizens, more so than in the political establishment.  I am not referring here to the political system, which has its weaknesses and which we want to change, but to the political establishment.  I am not saying this in the romantic sense.  I firmly believe in Democracy.  This is my belief and my principle.  I also believe that this principle has its deep roots in our movement, in the political and cultural traditions of this party.

When we announced our initiative, despite the outburst of different systems as soon as we mentioned the referendum, our citizens for the first time in many years heard that not only do we heed them but also that we are allowing them to make their voice heard, we trust in the people.

We believe in people’s judgement of this major political issue, – with the right information of course.

As to our partners they recognise of course the right to go to a referendum, elections, or anything else.  As I said in the Cabinet meeting our partners also want everything to go smoothly and not to have to face elections or a referendum which might make things difficult.

I would like to point out here that we would never have a referendum on whether we are to remain in the euro or not.  This is not an issue for us to ask the Greek citizens on, we consider that it goes without saying as we have pointed out in the past.

I said yesterday in Cannes that we can not ask such a question.  I want however to be quite frank with you all and say that if we do not meet up to our obligations the issue of the euro will arise. We would have had a referendum on the agreement, in other words, on a broad consensus as I said in the cabinet the day before yesterday. This package, as I said in Cannes yesterday would be the basic issue of the referendum. This decision would then have been the guarantee for our participation in the euro.

The rejection of this package would mean for our partners the beginning of our exit out of the euro.  That is absolutely certain.  In our discussion we were told that if Greece decides to leave the euro, we can re-discuss their re-entry only after ten years have elapsed.

The final result, however, of the rejection of the 26th October package is still centre-stage.  It is not the referendum.  Let us not make the mistake that many would wish – the referendum is not what is at stake.  What is at stake is whether we are ready as a country, not as a government, to implement the decisions which we tried to achieve of the 26th and the 27th October.  It is my belief that we can.

The rejection of these decision, whether by referendum or due to losing our parliamentary majority on this issue, or by its rejection due to the impossibility of implementing it caused by groups staging sit-ins, or because we do not pay, or due to anything else, would mean exit from the euro.  This is something we must understand.            The question therefore is not one of ‘referendum or not’, but how are we to ensure the best possible way to implement the decision of the 26th and 27th October.

It is not the referendum that is at fault for any abnormality.  It was the impossibility of our society, our political bodies and institutions to implement the package that this referendum was to ‘cure’.

This is how we arrived at the events of Monday, with a politicians refusing categorically to undertake their responsibilities – and the discussion over the past few days in Greece has been very revealing, probably outside of Greece too.

For the first time however in two years nobody could hide however important a personage.  Those who accuse us of being conciliatory are now begging us to vote to show that we are responsible patriots.

Who is afraid of the people now?  Even those who used to ask for a referendum do not dare to speak of a referendum.

We in our party never feared the people.  I understand the moral burden of all our members who have expressed their fears.  What are the alternatives though?

There were three.  The first I consider catastrophic which would have been to take the country to elections now.  The parliament would have closed and we would have a polarisation of the political scene, now that society is under pressure and it is doubtful as to whether we would have reached elections without the country going bankrupt, and having lost a lot of valuable time as well.

The other alternative was the referendum which has no relation to the change, via elections of the government, but would have been the continuation of our work in order to win a resounding ‘yes’ and to prove to Europe that we are the ones who desire change.

The third solution of course would be for there to be an understanding and convergence as to what is politically at stake and more specifically the decisions of the 26th and 27th October and our loan agreement.

I personally had tried to establish this collaboration before the elections with something else in mind a t the time of course, but even after the elections, on a number of occasions, but had no success in the effort made.

I understand all the difficulties of our members, and feel them also.  We are carrying a cross and are being stoned as well.  It was therefore imperative that we shape a broader consensus in some way.

As I said the referendum could have sent a positive message.  If we had the dilemma of ‘a consensus or a referendum’, as I said yesterday as I came out of the meeting, and as I told our partners, we would not have even needed a referendum.

If the opposition comes to the negotiating table I said, we are ready to move ahead with ratifying the agreement as soon as it is ready and we do not need other solutions.

We all heard the statement from Samaras.  I really do want to believe in his good intentions expressed as to collaboration on the issue of the vote on the loan agreement.  I wish for this reason to welcome his stance today on the loan agreement.

I will not enter into facile criticism at the moment.  I think that now is the time for us to welcome a different national stance which can bring results, and I hope, the beginning of a new political culture, of a new political stance all round, not only of the two main parties, for the political future of this country.

It is a position which I believe the Greek people also welcomes, which it seeks and which shows the credibility of our political and democratic institutions.  The basic fact is that the New Democracy party said it would vote in favour of the new loan agreement.

In view of the negotiations ahead of us for the new programme I would say that we must call in the New Democracy party and ask them once again to come to the discussions of the new programme as co-negotiators.

I do hope that from now on there will not be any useless ‘no’ votes.  Once again many conditions have been set and I think that one cannot a priori either reject or accept them.  There must be a substantial discussion with the New Democracy party in order to see how we will proceed.  Each decision must however be based on essential data.

First of all it should be based on specific policies.  We are not talking of collaboration but for collaboration.  We are not talking of collaboration simply to divide out posts or positions.  We have very specific goals to implement, a beneficial historic venture and decision of the 26th October and on that basis to move to all possible convergences.  Of course the loan agreement must be ratified.  So therefore it is primarily a political move to have this collaboration.

What is also at stake is for there to be a pillar of stability, of our parliamentary group, which means us, you.  We are keeping this country on its feet and we are still the pillar of stability in this country.

For this reason  the vote tomorrow  is of such importance, because it will stand as a guarantee  as to how we should then proceed according to the decisions taken and how we will discuss with the opposition and those forces that will really to work with us and under what conditions

I am however, glad that the opening up of the discussion on the referendum has created in many a positive, a beneficial shock and has brought positive results to the political circles of this country.

The real problem however, dear friends, still remains.  What we are trying to achieve is the implementation of the programme which is not a procedural issue, but a supremely political one.

We will work with unity and decisiveness in implementing whatever has to be done. The agreement must be implemented, we must have broad commitments in a very clear fashion, but we must also have a united front that this effort requires.

I am certain that the Greek people will value this effort of ours which opens up the road to overcome the crisis in a very difficult period.  There must be stability of the parliamentary group, of this government, irrespective of any discussions with any other political parties.  This is the prerequisite for the day after.  Dear Friends, I do hope that today will prove to be a very important day when voices for unity and for consensus will multiply and that this proves to be a very important day for our homeland.  The more Greeks say that ‘Greece matters more than any of us’, the better our future will be.

Dozens of times I have spoken about this unity which means that we all work together and we support each other, that we have discussion, collaboration, consultation, that we put the collective interest above the personal interest.  We have shown over the last two years that when we try we succeed under the most difficult of circumstances.

In the same way that we succeeded with the first package, just as we achieved the decisions of the 26th October, so too we will succeed in the next steps.  It is not only the effort undertaken by us all together.  For two years it has been the effort undertaken by all of us, of all the Greeks.

We are waging this war with the Greek people, not alone.  We are the soldiers of the battle.  I have said that the salvation and the change of the country is not an issue for one man alone.

We will not succeed alone, I will not succeed alone, and we will succeed all together.

It will be the result of as broad as possible consensus and participation of the Greek people in the effort.

The citizens have borne the burden with sacrifices and now have the result which is the reduction of the debt and a new prospect.  We have achieved much to date, due to our serious approach, our decisiveness and our responsible stance.

You as deputies of Pasok have voted and supported each bill of law, no matter how harsh, and you have done this to save and change our country.  You have supported your citizens in your constituencies and of course we all face difficulties and the change of our country.

Your stance is heroic. Today your stance is a responsible one and a sign of political culture and superiority.

I would like you to continue like this.  I want you to last the course, and you will in implementing this programme.  This is not for me, nor for Pasok, not for our Government but for the people, for our homeland and for our children.  For our common future which has been filled with optimism, I believe, after the beneficial agreement of last week.

We have the potential, we have demonstrated this.  We have the potential and the people.  Our people never defaulted.  Mentalities have gone bankrupt and die every day, – those mentalities that brought us to this point.

On the 27th October in my message I said that we have drawn a definitive red line across the past.  I care not for what we did, but for what we are doing.

We have much work ahead of us for prosperity, but we will succeed.

Thank you.

>> Photographic material.

Dear Friends, dear Colleagues, after much discussion within the Movement and more broadly within the framework of a social dialogue, I took an initiative to take us forward.  This initiative is the calling of a referendum.

For the first time after many years the people will give an opinion as to the course of this country.  This initiative was not taken in a vacuum. The option of a referendum is both public knowledge, but was also discussed a number of times.

It is a basic pre-electoral principle, a basic position that both I and the party hold and when the Lisbon Treaty was submitted to Parliament for ratification it was on the agenda of the Cabinet and Parliament as a possible option.

It is a supreme democratic process provided for in our Constitution, and many democratic countries in the world and Europe have used it to enable their peoples to express themselves and to decide democratically.

Therefore I would like first and foremost to stress that any wild reactions are unacceptable that wish to undermine the right of the Greek people, on the basis of various danger mongering arguments that we run a risk if the Greek people express their.  This logic stems from a very anti-democratic concept as to the maturity of people and their ability to take a decision on a serious major national issue.

We are a democratic Government and a party that demonstrates clearly how democratic it is by asking the opinion and decision of the Greek people.

The second issue is also a substantial one.  We find ourselves at a very difficult juncture as a country and as a society.  We have been struggling for two years ceaselessly in order not to fall into the abyss; we have struggled to convince our partners and lenders for a viable and smooth solution to be found.

We have come to the conclusion after a difficult path, through a morass of suspicious criticism, self-serving populism and hypocrisy from a large section of the political spectrum, to this extremely important historic decision of the last Summit.

Even after the Summit decision however, a large proportion of the political spectrum, along with vested interests, whom we know for years have wanted to dominate any power in our country, has undertaken every endeavour to dismantle this result.  Moreover it has done everything it can to imbibe hatred into a part of the population in order to thwart the implementation of this programme.

It has wanted to create the feeling of chaos, as we have seen for example in the recent parades, where an effort was made to undermine and insult the institution of the President of the Republic.

I also remind you that until now, not one single political Leader has taken a position as to the essence of the agreement, not one political party has told the truth to the people, – that this agreement constitutes an enormous ‘window’ of opportunity for the country.

Instead of this, even though they want this agreement to be implemented, they hide behind their minority, causing dissolution everywhere and spreading nebulous and vacuous criticism.

We have succeeded in bringing to the country a favourable agreement for its future.  We all recognise the difficulties of implementation and you know how we have toiled for this over the past few months.  The problems of implementation have become obvious, even with the evaluations, which will continue into the 7th instalment, the 8th, the 9th – there will always be an evaluation.

I want to be clear on this:  a decision was taken in a recent Cabinet meeting, and in Government Committees, and in individual discussions that these changes ahead of us now will be made with the Greek people, – that it should also participate and create.

We have taken a decision for the rule of law to prevail over lawlessness and this applies especially to large-scale interests and privileged parties.  We also know that the next stage requires the broad support of the Greek people, of the conscientious civil servant, the trade unionist with a new creative role, the productive entrepreneur who does not seek to evade taxes.

This is something that concerns not only the State but also the citizen, mentalities, practises, the shaping of a society with cohesion and a common conviction as to the future, a new patriotic concept of a national conscience, a new commitment for the State, for its institutions, and as to the role we have, as to our position within the European Union.

This cannot be achieved simply by laws or by decrees, or by policing.  This can only be achieved only by a broad understanding and participation of citizens – I am convinced of this.

This could have been achieved through a broad political consensus, even by a government of national unity or a government alliance, with a broad outlook, but with basic social and political goals.

This was attempted to no avail so far, not due to our disposition.  I repeat this.  Therefore our choice was a much clearer one.  We either call national elections, or instigate another procedure to make the citizen a participant.

National elections would mean, dear colleagues, avoiding our responsibilities.  It would allow a nebulous state to develop, with vague promises, and there would be an ambiguous mandate to the new government thus formed.

Apart from the damage and attrition of a new electoral campaign period, where everything would be called to a halt, we might also slide into the danger of bankruptcy.  A Referendum is completely different from national elections, which require campaigning out in the constituencies with ministers absent from their posts, and where most likely the result would be a government unable to govern and implement what is necessary.

On the other hand, a referendum would be a clear mandate and a clear message within and outside of Greece, as to our future in Europe and our participation in the Euro, and making a clear decision on this.

Nobody then either in or outside Greece could then question Greece’s place within the Eurozone.

What has changed to cause this ‘rabid’ reaction from all the political parties and most of the mass media against this proposal, which should be discussed at least calmly and with sobriety?  This should of course be in good faith, since any proposal or initiative has its pros and cons.  But what has changed since the announcement of the Referendum for so much commotion to be unleashed?

It is obvious what has changed.  First of all the new loan was agree, and some bankers are worried, some mass media are in huge debt and a search is underway in Switzerland.  Those who placed their bets on a default of Greece have understood that they have lost their money, just like those who bet on a return to the drachma.

This and other things has changed.

Suddenly a referendum has become something awful and fearsome for them.  The Opposition which believed that we would not make it in the Summit and hoped that we would fall from power now sees that by a Referendum it might find itself in a corner, because it is not making any positive contribution.  They fear the people.  They speak supposedly on behalf of the people, but fear the will of the people, because they do not accept the fact that citizens can decide for themselves.

Up to now they said the new agreement would be a catastrophe.  Now they pretend to fear that with a referendum this agreement will not be implemented, which for them was a catastrophe!  This is the supreme contradiction that everybody sees.  They have not decided what they want even!

Perhaps our partners fear the Referendum?  They were well aware of this option and they will respect and support the efforts of the country.  But they are of course uneasy, and of course they would wish for things in Greece and Europe to be calm and simple.   And of course they would not want any perturbation of the markets with the prospect of a referendum, but more so with possible elections.

But we must ultimately send out a message especially to the G20 that what we need is for policies to be decided upon which will ensure that Democracy prevails over any desires of the markets, and this is what I will tell them tomorrow.

For some time now we have spoken of the need for serious changes to the international financial system – for transparency, to tax havens, the CDS,  derivatives, Rating Agencies, transaction tax, – some of these decisions, supposedly, were taken two years ago and others more recently, but nothing has been done.

There is huge tax evasion, not only in Switzerland, but elsewhere, and the international community does not have the courage to control the phenomenon in precisely that decisive manner with which it controls the budget of all Eurozone countries. It should audit in the same decisive way the bank, the bankers, the bank deposits of individuals in various tax havens.

This money has been stolen from nations, not only the Greek nation.  In Greece too, unfortunately, there has been capital flight which of course creates great difficulties in any economic recovery or dealing with the nation’s debt.

What we are trying to do is to change society, to make the citizen a democratic participant.  This is the historic challenge now, apart from saving the country from default, which we have almost fulfilled.

We also have our democratic principles, and as I said, we will not implement any programme by force, but only with the consensus of the Greek people.  This is our democratic tradition and we demand this be respected abroad.  It is my belief that it will be respected.

Already there have been expressions of support from Governments, but also from leaders of other socialist parties in this direction.

There will be a perturbation on the markets, but only temporarily.  The approval of the new agreement on the basis of a referendum will be in Greece’s favour.  Everybody will be mobilised to make the PSI a success, which means the participation of the private sector, because otherwise they too will lose out as they know full well.

The only ones who do not want the agreement to succeed and for Greece to default are those who are already bankrupt, who are trying to organise a new instability, who want chaos, as can be seen from their behaviour, such as for example, in their behaviour during the national parades.

The dilemma is not ‘this or that government’, but rather ‘yes or no to the agreement’, ‘yes or no to Europe’, ‘yes or no to the Euro’.  Perhaps I should mention again the Government of National Salvation’ that I tried to achieve first?  This is what the New Democracy and left-wing parties rejected.  Now that they see that their plans have been foiled, they reveal their true selves, because they fear the people, but we do not.

What is it that the Greek people want?  Are they asking simply for different people to take the seat of power? Or do they want more substantially for there to be radical change in policies, in order to deal with reactive vested interests which brought the country to this state, for which the Greeks are paying unjustly?

Our answer today must be that we are not yielding.  Our answer today must be that we stand united front and seek a plebiscite unhampered.

The only thing that we and the Greek people want is the salvation of the nation.  I am convinced that our citizens will express this by a positive decision as to the future of the country.

From tomorrow the debate begins in parliament on the vote of confidence.  I have asked for this because I described a very specific framework of action.  These are actions which are imperative for the country and the implementation of an agreement, a framework for major changes and reforms which we have undertaken to implement so that this historic opportunity is not left unexploited.

For this to happen however we need calm, sobriety, the support of society itself, and not misleading information.  These three days will be an opportunity for every Minister to inform our citizens and Parliament as to our priorities, the programming and the schedule we have ahead of us.

As I said there are people who do not want this effort to proceed, who see citizens as clients, as hostages to middlemen and petty politics.

We must now reveal who it is that does not want citizens to speak out, who want truth and logic to be substituted for facile propaganda and fear.  When we voted on difficult legislation in the past, when we were deciding our accession to the Support Mechanism, when we were voting on the Medium-Term programme, certain social minorities chose violence, provoking chaos and all this supposedly in the name of the people, whereas today they do not want citizens to make their voice heard.  They react of course because they do not speak for the people, but on behalf of specific interests.

I would like to remind you that we have taken decisions, but ahead of us there are more decisions which need to be taken.  My reference to reactions is not perchance, because even if some of them are genuine, there are however reactions instigated by organised forces.

We now demonstrate that we are serious when we speak of bank accountability and hold them responsible.  For the first time we are moving towards transparency of the banking system which will invest in the real economy.

For the first time we are taking serious steps with arrests for fuel smuggling.

For the first time we are talking about bankrupt mass media, which continue to operate without anybody understanding where the money is coming from.

We are cleaning out the world of football for the first time.

We are publishing a list of tax evaders and chasing them up.

For the first time we are locating bank accounts abroad of tax evaders.

For the first time a Government is trying to clear out the stench of vested interests which, for years, have held sway.  This is where there is most reaction.

We will not give up. We will fight.  Since some are talking of government instability, I would like to remind you, as I did yesterday, how we must implement our task of dealing with immediate and vital duties in the interest of our country and citizens, and the intensive work we must undertake over the next few weeks.

I wish to stress our priorities for this historic success to ‘take root’, in other words to avert anything that could jeopardise it.

First of all, in negotiations with our partners, we will immediately clarify the contents of the new programme which will accompany the 100 billion euro loan.  This will start immediately.

Much has been said of the banks and as to whether they will come to the negotiating table or not, due to the announcement of the referendum.  I wish to stress here that they have already announced that they will be at the negotiating table.  I believe we will achieve the best possible negotiation through the plebiscite also.

Secondly, as to the decision of the European Council, we have until the beginning of 2012 to hammer out the details fully to quantify debt reduction and interest payable as well as the burden on our citizens.

This is a vital duty that must be fulfilled.  Then there are the prior actions we must take for the 6th instalment which you know full well – Mr. Venizelos has briefed you, and Mr. Sahinidis can clarify.

Our goal is to receive the 6th instalment within November, within the next few weeks therefore, so that there is substantial market liquidity created, which means we cannot slacken our pace over the next few days.  We must move on decisively.

We also have decision on important issues as follows: the National Tax System by the end of the year, the 2012 budget, ratification of the legislative act to increase bank guarantees, as well as other direct legislative initiatives.

These are imperative.  We also have major political priorities as I analysed yesterday. Since there is a long list of them I will ask the Secretariat to distribute the text so that you are all aware of them.  These are the basic priorities as you know, and which we have discussed.  By way of indication, I mention the ‘means test’ for all, the major bill of law on entrepreneurship, the issue of speeding up legal proceedings, the plan for the centre of Athens, etc.

Dear Colleagues, this is what we have ahead of us, together and individually.  What I said yesterday is a step towards enabling us to proceed smoothly with this course.

It has unleashed panic, now intensified with the proposal of a referendum.  So much fear lest citizens be allowed to express their will fairly and freely!  Citizens should reflect upon why certain individuals do not want them to express their opinion.

We have said we will seek the opinion of citizens as to this supreme national choice.  All these reactions are based on a common premise, their interests are affected and they want to deprive us of a major success.  We will carry on with the priorities set.  We will not be thwarted. Only political abnormality can remove us from this course.

This is why we stand united, rallied together and we will proceed.  This is what we must demonstrate today.   We have taken on a huge burden without being responsible for it.  We have embittered our voters in order to save the country.  Now that the burden is to be lifted from the citizens, now that a path has been opened up to rid us off all dependence, efforts are being made to stop us.

I also wish to say that there are forces already moving on the borderline of institutional derailment.  You read the announcements of the New Democracy party, of Mrs. Bakoyianni, of the LAOS party, openly inciting their members of parliament not to give us a vote of confidence.

This is why we must all deal at this historic juncture with a sense of responsibility.  We must deal with these efforts to provoke institutional chaos that some people are trying to achieve.

It is only with unity and with clarity of expression from us and from the Cabinet that we must move ahead.

Dear Colleagues, dear Chairmen, the Summit Agreement opens up a new era for Europe and for Greece.

Europe has taken an historic decision to move forward united and to demonstrate solidarity with the Eurozone member-states and beyond and we have secured for our country a very important reduction of our sovereign debt.  This will relieve us and give our country a new perspective and reduce the difficulties of all families in Greece.

This would not have happened if our Parliamentary Group had not risen to the historic occasion two weeks ago.  The Parliamentary Group of Pasok rose to the historic occasion in order to achieve both today and for forthcoming generations, a favourable decision for our country when we sought the support of all so that the Government might go to the Summit Meeting with the maximum of negotiating strength.

I would like to thank all of you and each of you individually for this struggle we are waging together.  We are honouring each member of our parliamentary group for their stance, courage, tenacity and endurance in these difficult times.

We have defended patriotically the national and historical interest with a decisiveness that characterises our party, but also every citizen in Greece that knows how to fight.

Dear Colleagues, what have we achieved:  the agreement concluded at the European Council removes uncertainty and allows us to look at our future with a considerable burden of the past now removed.

It gives us the opportunity and the necessary tool to determine our own future on the basis of better prospects.  Not only does it confirm our position in the hard core of the Euro, that protects us from other ills, but it also reinforces the possibility to regain our strength and stand on our own feet again and on our own forces and not on ‘borrowed’ ones.

The basic negotiating goal as we said was not only a new programme to support our economy over the next few years, but to safely rid every Greek family from a substantial burden of the excessive debt.

We have succeeded on both counts.  With the implementation of the agreement our country will have at its disposal a new support package of 100 billion euros which is the largest such programme on the planet – to cover our borrowing requirements, but also on favourable conditions, much more so that anything the markets could offer us or even from other countries.

In the European Council we also achieved something more important:  an agreement to rid us of the excessive debt which is strangling us.  Tens of billions of Euros are being taken over by the Banks away from Greek citizens.

This is undoubtedly a huge write-off of debt, perhaps the biggest ever.  For decades in Greece the debt mounted up, for the first time our total sovereign debt will be reduced immediately over the next few months by 100 billion Euros.

Our country will also have 30 billion euros for the effort to reduce debt in the individual negotiations to follow with the Banks.

What does all this mean for the country and especially for Greek citizens?  First of all, that we have made a huge step towards removing insecurity. The needs of our country are covered for the next few years and the debt is substantially smaller.

This gives us the opportunity to proceed with the changes which we want to make, without worrying about financing our needs.

Dear Colleagues the reduction of debt, combined with low interest rates, the long repayment period, the period of grace all mean quite simply that our country, the state budget, our taxpayers will each year be paying far lower interest rates.

I remind you that the interest repayments increased by 12 billion annually in 2009, 18-19 billion in 2012.  You can see the tremendous burden of just the interest

This therefore means that this is an agreement which will reduce the budget burden for a long period of time.  This is decisive for our future and the development of the country.  This is something that every family understands that has borrowed from the bank.

We have achieved not only low interest rates on borrowing with a long period of grace, but also to have a very large part of old debts written off.  This is a tremendous relief for the country and for all of us individually.  This is a relief for forthcoming generation which had been condemned to repaying this enormous debt.

It is also a justification of our efforts as a country recently and of the sacrifices and efforts made.  Some are saying that we are celebrating, but I must say one thing:  nobody is celebrating, because our future has not suddenly become rosy.  It has however become easier.  Finally, any misery-mongers must understand that nobody will forbid us for being happy at relieving Greek taxpayers of billions of Euros debt.

When the implementation of this agreement is completed, apart from the immediate reduction of our debt, we will primarily have an immediate reduction of interest in our budget over the next few years.   This is not an abstract thing.  It means that the 2012 and 2013 budgets can incorporate this interest reduction.  It means that we will have a breathing space in budget execution over the next few years.

Secondly it means that once the agreement has been implemented in combination with the goal of a primary surplus from next year, the economic image of the country changes internationally.

In other words it means an increase in the level of trust in our country which is a decisive factor to attract investments and for capital to flow into the Greek economy, whether domestic or foreign.

It means that prospects will be opened up for the country to develop again and to overcome the crisis sooner.

Thirdly, the decision is important because it shows that when we work together, when we show tenacity, dedication and boldness in taking difficult steps, we are able to achieve very specific goals.  It means that our country has once again shown that it can.  It means that our efforts have been recognised.  It means that our country, armed with seriousness, effort and credibility can fight and win.

We are step by step attaining those prerequisites for a better future, by our own strengths and efforts.  The Council decision of course means something else:  that our partners in the European Union recognise these efforts.  They are our partners, not our enemies.  They wish for our success not our failure.  They want to help.

They have no reason to want to lend to the Greek economy.  They want it to stand on its own two feet, with its own surplus.

We are also listening to our critics; we are not turning a blind eye.  There are also those who genuinely want to help us to improve and achieve more.  We are listening carefully and adopting positive criticism.

I am certain that we can all distinguish however well-meant criticism from the crushing accusations from some quarters who want to constantly recycle misery, to cultivate despair and desperation and the feeling that all is in vain.

Here we have a hugely important success, a huge leap for our country.  We have been able step by step to help move out of the crisis.  We will succeed; step by step we will bring hope.

Dear Colleagues I consider that all the important forces must support this agreement. I consider that when informed correctly, all Greeks will also support it.  I understand the concerns however.  It is the job of all of us to ally the fears of people and to give the right information.  Unfortunately we see the very substantial effort to dismantle and misinform by many mass media and other political parties of course.

There are those who for their own purposes are cultivating fear constantly.  They are trying to present the reduction of debt as a problem.  We are still hearing criticism from some that we did not negotiate, whereas we have negotiated for up to one hundred billion euro reduction of our debt.

I want to explain and to assure you once again:  first of all there is full assurance for the banking system and of course of deposits.  If necessary we have all the necessary funds to support the banking system, which includes the 10 billion euros from the previous loan.  The reduction of public debt creates more security for the country.

It reduces the uncertainty for the Banks themselves, it increases their possibility to draw upon capital, and thereby, to provide what we and the citizens seek, especially small entrepreneurs, liquidity of the true economy.

If necessary we will able to support the Banks out of the state budget with ordinary shares.  This means that the wealth will remain that of our citizens and everybody gains from such moves, the taxpayers in other words and not only those who used to gain up to now and who are of course naturally annoyed.

It may be necessary for them to go through a period of nationalism, in order to achieve financial consolidation and later to be given over to private hands.  This will be a beneficial process for the Banks and of course will not be to the detriment of taxpayers but to their benefit.

When things return to normalcy the state can then withdraw and there will be added value for the state as is the case in many other countries.

Secondly, as I have already said:  the reduction of debt does not endanger either the Insurance Funds, or pensions.  The reduction to the funds’ assets is minimal compared to the support that the state budget provides every year.

On the contrary, the radical improvement in the economic situation of the country will bring more development and create a climate for faster economic upturn in the finances of the Insurance Funds, thus improving their viability.  The state will also make the necessary moves so as to replenish the assets of the Insurance Funds as I said.

Thirdly, for those who fear that this agreement will bring more austerity I want to assure you, austerity is engendered by debt.  Today we are paying the debts of the past which are enormous.

Fewer debts mean increased ability and time to move on with the changes which will engender national wealth.  This may sound obvious but unfortunately it is not understood by the mass media or by other parties.  It is so easy and self-evident but we need to repeat it.

There are some who are worried and talk of default.  This agreement however ensures that the country regulates its debts and will not go bankrupt.  This will mean that holders of Greek bonds will pay part of the cost for the irrational management of the Greek economy.  This is true.  If banks lose part of their finances of course concerns the banks, but we must work for the whole country, for all citizens, in the national interest.

Fourthly, we are being told that Greece will ‘be excluded from international markets for many years’.  Markets will open when they are convinced that we can ensure the money we have borrowed.  This is the same for everybody and for all households.  The fewer the debts the more easy it is to borrow as all citizens know.  Today we have taken a step in the right direction.

This is why it is so important to create a primary surplus, a goal which is now feasible.  This is one of the reasons that today we have been able to reduce our debt – because we are close to creating a primary surplus.

This means that new debts will not be created.  Just imagine what would happen were we to simply say ‘eliminate our debt, but we will continue to produce more debts’.  This would not convince any markets to lend us money given the impasse ahead of us.

Fifthly, we are told that in 2020 we will return to 2009 debt levels, so this would mean that ‘nothing will have changed’.  This is an immature argument; even a small child knows that there is no correlation between 2009 and 2020.

In 2009 the debt was 129% and a further 36 billion debt, with deficits and an economic recession. This is a certain route to default – that is why the previous government withdrew.  In 2020 the debt will be 120%, which is viable and in 2010 lower.

Had we not restricted deficits with enormous sacrifices our debt would be in excess of 230% of GDP in 2020 and of course we would have defaulted long before that.

If we do not make this difficult effort now to drastically reduce the debt, despite the efforts made to reduce our deficit, in 2020 we will have exceeded 170%.  We have reduced our debt by 50 unit points by adopting this framework

To explain that in more simple terms, in 2009 was running at 200 kilometres an hour but in the wrong direction, with new debts mounting.  Even if you put on the brakes, which we did, we were still some kilometres in the wrong direction.  In trying to manoeuvre into position we have taken on more debt.

So first of all we had to stop and turn in the other direction and create a primary surplus.  Then help came by way of fuel for the journey, i.e. liquidity, and setting us in the right direction.

One might go over the same route twice but it is one thing to be heading towards the abyss and another thing to be on course for growth.  But we are being criticised on account of the reduction!

We are being criticised for not having done this earlier.  We said many times over that had we not fulfilled our commitments we could not have negotiated what we did and what we renegotiated to reduce debt.  We did something that they thought impossible.  We reduced a huge burden safely.

This idea matured within the European Union, it required time, just as the creation of a primary surplus required time.  I would like to invoke the discussions I had during my meetings with party leaders and the President of the Republic where I set out all the options and negotiations undertaken on the issue of sovereign debt.

We could not discuss this issue publicly however at a time where there was a lack of credibility and everybody thought that Greece would default.  We would indeed have defaulted massively with untold consequences for our citizens, our banks and for our economy.

This is something our critics know full well because I was very clear on this point.

I want to refer briefly to the issue of deficit procedure.  Since 2004 the country has been under a deficit procedure, with a small interruption which with the luxury of hindsight should not have taken place.  Perhaps we should recall that the government was being attacked since then for crunching the numbers by retroactively adding to the budget defence spending and defence equipment procurements as orders?  This meant that the orders and not the deliveries were inserted into the budget so as to burden our governments with deficits we had not created.  The result was that we were put under the deficit procedure and seen to lack credibility.

Secondly, I refer to the second time we were put under a deficit procedure for the 2009 budget.  When talking to my partners I was told that this procedure is required not only for Greece but for all Eurozone countries because there are countries who were supplying false data.

The deficit procedure was instigated for very specific reasons, and our lenders of course wanted to be sure that their money was being used properly.  As Pasok we have nothing to hide, we never did have anything to hide because we want the good of the nation and national development and nothing else.

As to our call for experts we see this as a true opportunity.  Who is happy with how the public sector, the health system or bureaucracy functions when businesses wish to invest?  Instead of wanting to reinvent the wheel we will seek out those who can bring us best practices.

They will provide solutions which we of course will adapt to our priorities and needs, but this is a major opportunity to make great changes.

I wish to stress something else: we will accept any questioning of our patriotism from anybody.  We are doing our patriotic duty.  We are taking difficult decisions every day, with sacrifices and with cost.

This is a cost we assume for our country and for nobody else.  Anybody who believes that they can speculate or derive profit, whether for party political expediencies or not, by dividing people into those who love this country and those who do not, divisions which this country has paid for dearly in the past, anybody who believes that they will be untouched by any insult to our institutions or symbols of Democracy, are not subverting the Government.  They are subverting and refusing the democratic framework which is the achievement through struggles of the Greek people, the achievement of the Pan-Hellenic Socialist Movement for decades.

Not only are they making an historic mistake to the detriment of themselves and the course of this nation.  I cannot in any way condone violence.  What we can understand is the anger of people.  We too are angry because of what we inherited from the previous government and angry at the faults of the past and the state of country despite its potential.

Patriotism however is not to disdain our history and democracy.  Patriotism means creating the democracy we deserve, not to dismantle it.  Patriotism today means that we all put our shoulder to the wheel to overcome the crisis more quickly, so as to put our economy on course and not to depend on ‘borrowed’ strength.  This is patriotism.

Patriotism means that we take a look at our history and not repeat the mistakes of discord, divisions and using false arguments in the name of the nation which only lead to its detriment.

This is why I ask all of you to take a deep look at our history.  It is only be remaining united, cool-headed, and sober that we will make it.  This is the path we have taken and we must follow it to succeed.

Let us all together deny those who want to dispel this effort being made by Greece to stand on its own feet.

Patriotism today would not be the easy solution of flight, of negation and protest without proposals.  It would be the difficult choice of endeavour, of collective contribution of our genuine, independent and autonomous nation on its feet.

We must withstand the pressure being exerted from many sides which want to bring us to our knees for their own reasons, which are often speculation.

This is what Wednesday’s agreement is all about.  These are the advantages it offers us.  This is the result of our insistent effects over the past two years and of our citizens of course, especially the middle and low income brackets.  This is something we must recognise.

Just as in the past, the heroes of war come from the populace.  This is how we arrived at the agreement last week.  Is the effort over? Have the problems of the country been solved? -Of course not.  – Would that they could be so easily solved by one decision.

Just as with unsurpassable problems in life, so too the problem of the crisis in our country requires much effort yet.  Much must still be done, but a unique opportunity is being given to us.  Many would wish to distort this truth.  They say that ‘the debt has been reduced, but the agreement does not provide for the development of the country’.

Perhaps they should read the agreement more carefully.  It does provide for growth, but it will not come simply by pressing a button.  We know full well that growth means combating bureaucracy, corruption, it requires investment in new technologies, support for education and knowledge, for major changes in this sector too.

This is what we have ahead of us.  It is a challenge to utilise this window of opportunity to the hilt.  This is what we must do by 2013, by the next elections.  What are the steps from now on?

Dear Colleagues, last week we took a decisive step by gaining a great opportunity.  Now our first priority is to set the seal on this historic chance and to avert anything that might jeopardise this success, this decision.

Last week’s decision requires our decision, careful negotiations, a programme of action and legislative initiatives.  The decision of the 26th October must be implemented after negotiation with the banking sector.  Many of these decisions pertain only to us, whereas others belong to the common framework of changes attempted within the European Union itself.

This involves support mechanisms, protection against the appetite and the fears of the markets, but supervision and monitoring of all the Euro-group in an effort to put order in our fiscal finances and for Europe to be on track for growth.

These decisions therefore concern not only Greece.  The success of Europe will determine our success too.  The next few days and weeks are decisive in order to complete steps pending for the 6th instalment by mid-November which will provide substantial market liquidity.

We must also move ahead with our timetable for the major structural changes we must implement and which we recently voted on.  We must ratify the 2012 budget.  We must hammer out the details of the new support programme until 2014 when it will expire.

By the beginning of 2012 therefore this decision might have been elaborated fully and quantified in detail.  We will know by how much debt will be reduced precisely, the decrease in interest, the reduction of burden for our citizens.  This is our duty for the immediate future.

We also have a number of outstanding political matters.   We have set out our priorities for each sector of public life and those that we are committed to in our election manifesto.

This is not a matter for our creditors, but for our conscience, the soul of Pasok and the deepest desire and hope of citizens for the Greece they deserve.

It is for these changes and for a creative Greece that we came to power.  For two years now we have been fighting to save Greece from the abyss of massive default, but we are moving ahead with these changes, and they are more necessary now than ever, because they are the answer essentially to the Greek problem.

We must create a Greece of value, quality, competitiveness, sustainability, which creates jobs, attracts investments, that ensures social cohesion and certainty.  These cannot be achieved by wishful thinking, but by radical changes which though arduous are ultimately beneficial.

Dear Colleagues, for so many months our country has been walking a tightrope.  Our parliamentary group along with the government has needed to find extraordinary energy to avert the worst within a climate of suffocating pressure.

There will be a new landscape by the beginning of 2012 given the state of affairs we have created.  We cannot slacken our efforts, but we are entering a new phase.  We will be rid of the stress of wrestling every day with the spectre of default, with debt reduction, interest rates, etc.  We will be able to concentrate all our efforts not towards defensive action to avert the worst, but to the offensive for something much more creative.

We will all put our best foot forward to continue with the major changes embarked upon.  We will be able to move more freely at a faster pace to gradually build the Greece we want.

This will be done on the basis of dialogue, re-establishing our connection to society, which suffered due to the necessary austerity, but which thirsts for change.

These changes are of decisive importance and a roadmap we must follow in order to overcome the crisis and safely achieve sustainable growth.

We must not forget that the economic crisis is the symptom and not the cause of our problems.  The debt was not created overnight, out of the blue.  The problems ran deep and that is why we have priorities far removed from petty party politics adopted by many parties.

We have work ahead of us.  We have set as our priority the achievement of an effective state which stands by its citizens as the servant of public interest and not of selfish interests.

With the programme for a new executive state we will present shortly we are making the greatest change ever to the very structure and mentality prevailing in the functioning of the state, based on optimum international practices and OECD studies carried out precisely for this purpose.

This will also contribute to the better functioning of the ‘Kallikratis’ self-government.  With the new Public Sector Disciplinary Code we are building a Public Administration which is held responsible for the public interest, separating out the majority of civil servants who exercise their duties conscientiously from the few who neglect their duties.

A new era will be embarked upon with the digitalisation of all services possible, thus creating state-citizen relations of a different quality as to how the state deals with its citizens.

Secondly, the debt settlement relieves our annual interest payments creating a new economic landscape.  It allows us to put all our effort behind growth, to put the country on a course for development, simplifying drastically procedures, cutting through red tape and the bonds strangling creativity.

This has started with the ‘one stop shop’ service for the establishment of companies.  It has become apparent that this is feasible – we have radically simplified economic licences, we have abolished bureaucracy and delays in works permits. By speeding up the National Strategic Development Plan (ESPA) we have been able to achieve the recent decision to reduce the national contribution to this.

By making use of our comparative advantages for quality agricultural production and for green development, as in the case of the major project ‘HELIOS’, where we can produce solar, wind and wave energy and sell it with great profits for Greece to other European countries and beyond.

Thirdly, to achieve an educational system that does not ossify citizens.  Major changes have been made to the new school and there is a great change due to the entrance system to higher education so as to instil critical thought and offer new opportunities to all schoolchildren without the enormous cost of private tuition.

Fourthly we want to have a health system that respects the taxpayer and provides quality service.  At the beginning of 2012 at last we will have a primary health care system in our country – a vision postponed for years – and true welfare will be offered to those who need it by rectifying a corrupt system and helping the unemployed especially through a system of training and support.

Fifthly we will have major changes to institutions and to the political system which has been centre stage recently, so that citizens can acquire trust in the State. The rule of law, transparency, a true ‘means test’ for all involved in public life, not only the members of parliament, but all public functionaries, journalist, judges.

There will be rules of transparency for funding of political parties and a new electoral system to break through dependencies.  There will be an amendment to the constitution in the future after substantial dialogue.  We will step up efforts to mete out justice because this is one of the basic elements that citizens are fighting for today and for which they feel hard done by.  We will also intensify stamping out tax evasion and achieve tangible results.

We have two years ahead of us, dear colleagues, with these major priorities.  This is the road to changing crisis into opportunity and to make good use of last week’s agreement so as to achieve a much better Greece.

I assure all citizens of Greece that are worried today that the path is not an easy one but it does have an end which will be positive for all of us.

We started out with difficulties but have reached a turning point without falling.  There may be wounds as in any battle, but Greeks have endured proud and we are doing and have done our duty.

We are therefore called upon to liberate forces and these are not words chosen lightly.  Our country has the potential, the wealth, the human resources, natural resources and can produce and export and import, we have been blessed by nature, tradition and history.  We must utilise our cultural heritage, technology, agricultural production.  All these are new possibilities providing new jobs for our citizens.

Of course today we cannot say that we will increase wages.  We can however say that we will fight for this, we will create new investments, new jobs and new prospects needed.   We will intervene with changes here.  We will sweep aside the obstacles and create a society where the rule of law prevails.

Dear Colleagues now that we are facing so many major challenges we must change certain practices of the past.  Some people aiming for instability are investing in the chaos of this country, each for their own reasons.

Does the majority of this country however wish to enter a phase of instability and anarchy? Does the majority in this country want to cultivate hatred and accuse others of treason?  Do we want national division?  Will this be the solution for Greece? Will this solve our problems?  Will this change the evils of our society if we fight each other?  Are we to fight a secret war and think that it is heroic to cancel national parades?

Is it heroic or patriotic to attack elected person – I stress- persons elected by the Greek populace, thus undermining basic democratic institutions?  Is it heroic to make insulting gestures instead of engaging in dialogue?  Are we to divide Greeks again into nationalists and ‘miasmas’?

Who really believes in these solutions?  I must stress again dear colleagues – I do not question anybody’s patriotism.  We are all patriots.  But I too have the right to express my opposition to what I consider a disservice to my country.  Violence does no service to our nation.  I consider that seeking out a scapegoat is not a service to our country.  I consider that lies and conspiracy do not serve our nation.

I consider that the ‘I’m not paying’ movement, harms the nation.  Do you think that by closing our borders to the representatives of the Troika that our problems would vanish?  Would we solve our economic problems by setting up kangaroo courts as some people suggest?  Would this improve our educational or justice systems?  Would this stamp out tax evasion? Would this bring investments to the country? Would this change our health system?  Would we achieve regional green development? Would we change the political system thereby?

I think that these questions have an obvious answer.  Instead of changing Greece it would lead it to a new and bloody division.  We would lose a major historic chance to make Greece truly independent, autonomous, and able to stand on its own, with its own strength, not on ‘borrowed’ strength.  This is what patriotism is.

Of course there are interests that are affected by the policies we pursue and which want to halt the efforts of the government which is striving for the rule of law, the right of citizens, for equality in the eyes of the law and for transparency.

They are the ones hiding their true intentions behind patriotic and leftist slogans.  Some do not want the agreement to be implemented as it will cost banks billions of euros.  They want the banks to be saved and to offload the burden of 100 billion euros onto our citizens.

Others, faced with the default of their businesses which are in truth bankrupt, even among the mass media, hope to avoid a possible nationalisation of the banks and the transparency that consolidation of accounts will bring, so that they can continue to receive loans outside of the bank criteria.

Some would wish a return to the drachma through default and their deposits in euro would be brought from abroad to buy cheap in a bankrupt Greece with its drachma.

Some do not wish for the legislative framework to change, which allows banks to avoid control of their action in and outside of the country, or which allows them not to divulge their names to the Ministry of Finance, as we have now done for the first time in history.

Some people, often the same, hope to halt the government’s attempts to discover these amounts which were sent abroad.  This effort at transparency would reveal all the truth as to the role they have played.

Others wish for a weak government with shifting government formations, with people under their influence.  Some people want to count their election percentages in the belief that it is the time to invest, having exploited the suffering of our citizens, and want to cash in their dividend, indifferent to what will happen tomorrow, as to how the country will be governed, indifferent to the major challenges we have ahead of us now that the country is at its most vulnerable.

Dear Colleagues, all these forces, however different, express the same thing:  they want to stop our progress before the results appear.  They would want the government to fall, our government, so as to stop the unfavourable developments for them, or to serve their own selfish and petty political interests.

In the name of our citizens supposedly, they are trying to bring matters to where they will be tragic for our citizens and they will be.  This is a mentality of rottenness, waging a battle to the end for its interests and impeding any effort at the rule of law.

Dear Colleagues, let us have no illusions as to the nature of the political conflict and battle we wage today.  We are faced with a coalition of different forces ‘playing their hand’, protected by those who uphold their interests, perhaps the bankers, who long for the drachma and think that they will make a profit from a general state of abnormality in our country.

They forget however that we live in a parliamentary democracy with rules.  We will therefore continue to prove them wrong by our unity, in their efforts to undermine this course.

According to our Constitution, we will be judged at the end of our four-year mandate, not in the middle of it, especially  when our country has immediate and vital priorities to implement, when we are at the worst moment of the storm, it is not possible for us to give up the struggle just because it suits some people.

I also address the New Democracy Party and left-wing factions supporting it.  I would have expected you to learn from your history.  Look at what demagogy led to in the past, where the outbursts of passions and hatred led society.  Wherever such games have been played it led to irregular situations.

The first victims are the weak, not the strong, nor the economic factors.  The country always lost out when some people decided to play with the fire of popular ire.  We all assume our responsibilities of both today and yesterday.  Do they want us to embark upon a never-ending discussion?

Greeks know their history.

Much has been discussed. The idea of co-government has been discussed as well as terms and practices that did not succeed and which remain on our desk from the beginning.  Before the elections I asked those forces who want to join us to work with us in the government even.  That was before the elections.

On one basis alone:  the true intention for real political agreement as to where the country is going.  Not to distribute power or to act as bit players for the big wigs.  Such an agreement obviously is not in the offing.

Our citizens are seeking a common ground, the obvious, I would say.  I am therefore making a proposal:  we will not bury our political differences or our ideological platforms, but there are things that are self-evident upon which we should agree, such as transparency, combating corruption, the obligation to pay taxes, through a more just and simplified national taxation system, which we will soon be tabling for discussion in parliament.

We are also proposing meritocracy in the public sector, but this is not accepted by some political forces even today.  We also propose major reform to the education system – here we achieved a broad consensus, but education needs further changes and further consensus.

We need further structural changes to our economy, for it to become viable and for us to develop our comparative advantages and to decide together what we should invest in, not because of cronyism or influence.

We must set out the basic direction for our country and support it.  We must combat bureaucracy and release the real forces of our country.

This must all be done based on justice and a deepening of Democracy, along with a political system that must change.  Let us set two common objectives:  first of all the amendment of the Constitution – this is where I believe we can have a substantial dialogue and convergence on these issues.

Secondly, to make a pact:  that in the next elections we will hold together, apart from the Constitution, whatever the government elected, the Opposition and any other forces wanting to participate will support the policies of that Government.

This would mean going to certain basic principles and objectives, irrespective of the electoral result, for there to be a common programme of basic changes for all.  Let us discuss in this direction therefore.  Over and above our differences, let us proceed together to re-establish certain obvious things for our country. We should rationalise the state, deepen democracy and combat illegality.

Greece can no longer endure division by its political forces.  Here I refer to the parliament and its role which should be enhanced.

I am asking for everybody to do what our citizens are sincerely asking us to do: the obvious – no to tolerating illegality, no to abstaining and criticising, but to support the obvious for us to move forward.

Dear friends, we are embarking upon a new phase of our history and we need to make decisive changes in our country.  Greeks are suffering and are unhappy with our institutions.

There are historical reasons for this – institutions in Greece and the State itself have become estranged from the citizens.  A battle has been waged for some 200 years now in our country to shape its institutions which will make Greeks feel that they are not foreign to them, that these are their democratic institutions, which respect, support, liberate and promote the interests of citizens and which contribute to the true growth of the country free of any burdens and dependencies.

We are against any clientelism which the state used to hand out privileges and make citizens dependent rather than free.  We must strike at this dependence which has brought us to the situation we are in today, under a deficit procedure.

What can we do?  We must ultimately create this confidence in the institutions themselves.  We must therefore truly respect our people and make them participate in decisions, a participant in our efforts.

I consider that this is the responsibility incumbent upon us all in this historic moment.  It is a collective effort but a personal responsibility.  The position of the country must be very clear because it concerns our present and future, free of any distortions or expediencies.  Under such circumstances the citizen comes first and has the first say.

This role is paramount without mediators, with open cards and no third-party interpretations.  In this case the answer from the people does not concern the election of individuals or the empowerment of parties, but determines directly, not indirectly -, the course of history.

In a Democracy, political parties and the representatives of citizens are the supreme expression of popular will and sovereignty. This is unchangeable as a principle.  It is also a supreme democratic function for the will of each citizen to be submitted in a primary, authentic, direct and binding fashion.

This is a clear position that no third party can misinterpret, nor alter in any way.  At a time when the political system is under attack and called into question, we have a duty to enhance and increase the role and the responsibility of citizens, thus demonstrating in practice, not only our respect, but also the basic premise that the citizen is the source of our strength and our very existence.

That is what the referendum is, dear friends, where the citizen is called upon to voice a clear ‘yes’ or a clear ‘no’.  We must go to referendum for this new agreement.  We must ask the Greek people to decide.

Democracy is alive and present and in this the citizen is called upon, over and above the electoral procedures established, to respond to a national responsibility with a ballot paper to hand, not to empower others to decide but to take a decision for his country and for himself.

The referendum which is to provide a national answer to a major national question constitutes the fundamental cornerstone for us to build with principles and rules a new period starting now.

To build a strong Greece where the citizen feels that he himself, with his vote, can shape his country and play a strong and dominant role.  We trust our citizens.  We believe in democratic participation and are not afraid.  We believe in our citizens.  We trust their discretion, we believe in their decision.  We are asking for sobriety, calmness, full respect of the rightful and substantiated information of citizens and not distortion.  Everybody should be heard and it must the citizens who will ultimately decide.

Do citizens want to adopt the new agreement or to reject it?  This decision is not avoiding the issue, not at all because this major decision needs to be implemented.  Should the Greek people not want it, it simply will not be implemented.  If it is wanted, then the people will decide positively.

This is a decision not on what party one prefers, but for which course this country should take.  We have shown that we have the political will, the historical courage to take useful and difficult decisions, irrespective of the possible political cost.

I remind you, dear colleagues, that we invited repeatedly the other parties to come to parliament and to vote on the agreement- both the previous one and today’s agreement, and for an increased majority of 180 votes, both earlier on, for the medium-term programme, for the new loan agreement, but there was an outburst of declarations by the Opposition denouncing the Government for wanting to avoid the responsibility of governing the country.  We of course have never shunned our responsibility but assumed it fully.

The same is true now, – we have a clear position and direct ourselves to all citizens.  We call upon them to play a chief role.  Our strength is the strength of our citizens.  We trust in our people and their judgement.  We do not hide behind slogans and generalised programmes or misleading announcements.  We are calling upon citizens simply and clearly to make their voice heard with a clear and simple ‘yes’ or ‘no’.

I am certain that all the parties, all social bodies, the young generation will defend the right of citizens to express themselves democratically and will respect their judgement.

The mandate will bind us all.  This is what we owe to our citizens.  Despite our differences and our conflicts we feel a common duty to serve the mandate of our citizens and the result.

The government has two years of creative work ahead of it with a specific programme.  We say no to national elections now because this would constitute an evasion of duty and petty politics which would divide the nation and weaken the effort of the government to devote itself to work of national importance and which will cost Greece a possible sliding along the slippery road towards panic default.

Within a few weeks this agreement will become a new loan agreement which will set out what our country must do to improve and to overcome the deep crisis and to move away from the present gloomy reality.

We must decide upon the new loan agreement, our commitment to the people, to ourselves, to Greece – we must decide.  We must all take up a specific position and look forward, we must look at the crucial decisions and dilemmas and assume our individual responsibilities as to whether we accept this loan agreement or not.

This is a supreme act of Democracy.  It is a moment of supreme patriotism for the citizen to decide upon.  Let us therefore give our people its say and for it to decide not as to individuals or parties, but directly as to the fate and course of the country.

This is the roadmap, dear colleagues, for the next initiatives we must take.

I am asking for a vote of confidence for this roadmap of political initiatives and a robust programme of change for the next two years.

First of all because the situation has changed since June, there is a new agreement from the recent Summit Meeting.  We must work in unity and decisively to implement a national plan. This will culminate in a referendum on this crucial national issue.

This effort rests on us, the parliamentary group, so more than ever it is imperative that confidence in our policy is expressed.

The programme of initiatives announced today imposes a vote of confidence being provided.  It is clear that with the agreement of the 26th October and the implementation of the new programme we can avoid more measures of fiscal consolidation.  It is however to make major changes to overcome the crisis.   This is the road map.  We are emphasising structural reforms and changes to central government, justice, the political system and the economy.

This is the clearest way to show that united we are proceeding with our plan and initiatives to take the country out of the crisis and for us to assume our responsibilities.

I am certain that the Greek people will, with their judgement open up this road.

Dear colleagues, as I said in my message to the citizens, once we win this battle I am optimistic that we will succeed in our next objective which is to create a productive Greece of justice and creativity.

We have the possibility of overcoming the crisis more quickly and paying less interest each year, re-establishing confidence in our institutions and our abilities.

There is much creative work to be done both within the government and the parliamentary group and within our movement for a period which is more creative than the first two difficult years where we had to deal with the spectre of default.

I am certain that just as we have successfully fought all battles to date to keep the country on its feet, so too we will work with even greater zeal and passion to change the country.

I wish you a successful battle and I thank you.

>> Watch the video.

>> Photographic material.

Ladies and gentlemen, President Keitel, thank you for your warm welcome. Thank you for your invitation. Thank you for the honour to speak at your conference.

We are living through a very difficult and complex crisis, in the world, in Europe and of course in Greece. And so many people in Greece ask me: Is all the pain worthwhile? Can we make it? Will we reach, all together, Ithaca, or will this be a Sisyphean task, to allude to ancient mythology? Is there any hope? Will we ultimately succeed?

My answer is yes, we can. Greece has the potential. Europe has the potential. And through global cooperation, we all have the capability to turn this crisis into an opportunity for real and necessary change.

After the crash of 2008, governments and multilateral institutions came to the rescue of our banks and our economies. However, we did not solve the underlying problems of our global economic system, problems like the lack of transparency in financial markets, weak governance of our interdependent economies, particularly in the eurozone.

And yet paradoxically what the markets are now looking for is stronger political leadership, to restore confidence.

Greece has been struggling for the past two years, not simply to reduce its deficits but to regain its confidence, confidence in the markets, confidence in itself.

My government has not shied away from self-criticism. We have been brutally honest about the political and economic failings that led us to the current crisis.

We know that this crisis, on the other hand, provides us a unique opportunity to launch important reforms, which we are doing, that Greece badly needed to become competitive again.

That is why the rescue plan for Greece is not only to keep us afloat. It is an investment in a different Greece, a Greece that is confronting problems that were overlooked for decades.

We have passed unprecedented reforms in a matter of months. Yes, we are making this crisis an opportunity. And I can assure you that your investment in Greece will not keep us stuck in the past. It is an investment to move Greece into the future.

What is Greece’s future? Well, let me begin with what we must change from the past.

First of all, Greece does have great potential. We are not a poor country. We were a mismanaged country. So total transparency and accountable governance are our priorities.

Let me give you an example. Every single euro spent by the government is now published online for every citizen to see. When we computerised medical prescriptions for one pension fund a few months ago, we had a decrease in costs by over 35%. With our first electronic procurement of medical equipment, we cut the final bill to one-sixth of the estimated costs.

But we still have much to do, and this is a project very complex and time-consuming. That is why I have asked for technical help and best practices from other countries, with the support of the European Union Commission. And for example, the German SAP will be very important in restructuring, reorganising our public civil service.

The Greek public sector was one of our major obstacles to growth, competitiveness and investment. Very soon this will no longer be the case. Whether it is setting up a business, getting building permits or dealing with tax offices, we are simplifying procedures and cutting red tape. We have already consolidated local government from 49 regions to 13.

So bad management of our resources was one problem. Lack of competitiveness was another. That is why we have passed a law, for example, effective July 1st, to liberalise dozens of closed professions.

Here easy money did not help, either. Let me give you another example. Over the last 30 years Greece has received important sums for agriculture. Yet the way the EU’s Common Agricultural Policy subsidised Greek products, made in Greece, made Greece less competitive rather than more competitive. From an exporter of agricultural products, we became a major importer. For a country with products with a worldwide brand name, our olive oil, our feta, our fruit, our Cretan diet, this was unthinkable. Yet it was true.

Now we are again becoming an exporter. We are investing in quality products, organic foods, green agriculture. Working with our business community, this year exports hit a historical record high, not only in agriculture but also in construction materials and medicines, in fish farming, in metals. This year our exports are up 40%.

Tourism is another area where we have made the most of our comparative advantages, to boost revenues. We had lost markets, but now we are targeting new markets, increasing quality and reducing prices, liberalising cruise ships. Again we reached historical highs: over 16.5 million visitors to Greece this year.

We have launched an ambitious privatisation programme to attract infrastructure, energy and real estate investment, starting with the extension of the Athens Airport concession and the sale of 30% of its shares, the extension of two gaming licences and the sale of the state lotteries.

There has been impressive interest in Greek harbours and airports. And from where? From emerging markets wanting access to European markets. They see Greece’s tradition in shipping and easy access to ports in the East as an ideal hub.

Those who have already expressed interest are China, India, Korea, Australia, Brazil, even Argentina.

We are working with Qatar. They are investing in our banking sector and many other areas.

In Germany you have shown the way in developing renewable energy. With our natural assets, Greece has every reason to follow your lead.

One of our most ambitious new projects is called Helios, Ήλιος, the Greek word for ‘sun’. We intend to develop photovoltaic units up to 10,000 megawatts and export this energy to countries such as Germany.

And investment in Greek sun yields 50% more than in Germany, for obvious reasons: sunshine. This is a win-win project for us both.

Both green energy and waste management are at a nascent stage in Greece. So here there is a dynamic emerging market ripe for investment.

So these are only some of the many bright prospects Greece holds out in the near future.

When I am asked, “Where is the European taxpayer’s money going?” I say first of all we are borrowing to repay. But secondly, we are investing in our strengths, not to become more dependent but to become more autonomous. Not to live on borrowed strengths, but to create our own Greek strengths.

And there are many traditional strengths we have, which we lost, which we have to reinvent, to make them modern in this globalised economy.

But today every Greek is still bearing the burden of past excesses. We are now in the middle of a very painful process of fiscal consolidation, and we know there is still much to be done.

But we have already achieved a lot. In 2010, we achieved the largest annual fiscal consolidation ever by a eurozone economy: a reduction of 5% of GDP in deficits. For 2011 we have set an ambitious target of an additional 3% and have taken very difficult measures to achieve it.

From a huge primary budget deficit in 2009, I am confident that Greece will have a primary surplus in 2012. We reduced our primary deficit by 5.4% in 2010. To give you a sense of the scale of this effort, the equivalent in Germany would be a reduction of over 100 billion euros in a single year.

As your Finance Minister, Wolfgang Schaeuble, has pointed out, the Greeks have reduced their deficit to an extent that, in terms of Germany, would correspond to a savings amount of 125 billion. That would be more than a third of the Federal budget.

But of course these changes are hurting. Major reforms in our pension system, education system, major overhaul of our public salary policies, major changes in our tax system have made these systems more transparent, more equal and most just.

Yet there are cuts. And the cuts are hurting Greek citizens, whose pay packets have shrunk, whose pensions and benefits have been cut.

Drastic measures have a dramatic impact on the living standards of our citizens, hardworking taxpayers, who have been asked to make enormous sacrifices to support the country. And they are doing so.

Now of course many Greeks feel that they have little left to give, except a spirit, a spirit of change, which we need to kindle, we need to nurture, we need to encourage.

That is why the persistent criticisms levelled against Greece are deeply frustrating, frustrating not only at the political level, where a superhuman effort is being made to meet stringent targets in a deepening recession, but frustrating also for the Greeks, who are making these painful sacrifices and difficult changes.

We are not asking for applause. We are not even asking for people to say that this is going to be an easy project. We need years to make these major changes.

But we are simply asking for respect of the facts. And you as businesspeople, you know that inspiration, innovation and motivation are important parts of success. If people feel only punishment and scorn, this crisis will not become an opportunity; it will become a lost cause.

And we are determined; the Greek people are determined to make this a success.

But when many ask me, “But do you have the support?” my first answer is, “That is not my problem.” I have said I am here to work for my country, save the country, change the country. Whether I am re-elected or not is not my problem. My problem is to save the country.

But I also know that every Greek does want a different Greece, does want Greece to change. The only question they have is: “Is there real hope?” And this is why it is so critical that our European partners have stood by us, and Greece is grateful for this solidarity, because this gives us the time to make the changes.

I understand the political difficulties in our European family, as one country wonders why it should support another for its past mistakes, or why some countries should take so much pain for a crisis that began with the banking system.

But as I have said, this is not an investment in past failures. This is an investment in future successes, our common success.

But now Europe must go one step further. We must prove to the markets that we have a firm grip on the debt crisis and that we are determined to resolve it together, because our common future depends on it.

Whenever I think of Europe’s future, I also remember Europe’s past. In the bloody and bitter aftermath of the Second World War, Europe decided to “make business, not war.”

This was not just an economic objective. It was above all a profoundly political objective, to build a Europe free of destructive nationalism, ethnic hatred and poverty.

Caught up in the current crisis, it’s easy to lose sight of the bigger picture. But let’s try to get some historical perspective on our Union, a Union of nations with a history of violent conflicts, a Union of nations whose borders have often been disputed, a Union of nations with all kinds of political systems and competitive differences.

Only a few years ago Greece was emerging from a dictatorship, cut off from its immediate neighbours because of the Cold War, in a costly arms race with its NATO ally, Turkey, and with little connection to its traditional markets and friends in the Middle East.

Today Greece has invested in the Balkans, enjoys a boom of exports to Turkey, is deeply involved in helping the Arab Spring, and is again becoming a transport hub between East and West.

This is the work of Europe. Instead of war and imperialism, today Europe exports peace, social and democratic principles. We support common principles, share common interests, resolve our differences through democratic processes. Many of us share a common currency.

Today our nations not only enjoy the longest-ever period of peace and stability, but we are engaged in daily cooperation.

So if Europe is a peace project today, it is also a model, a model of how we can face the challenges of a globalising economy.

So as I hear sceptics braying about the euro’s imminent collapse or the failure of the European Union, I remind myself of why our Union exists in the first place, of the vision of Chancellor Adenauer and Robert Schuman, about our common European future, and why we must go forward with a renewed sense of shared purpose to strengthen our Union, and not abandon it.

In today’s world of climate change, democratic springs, mass migration, financial crises, the need for green growth, if we did not have a European Union we would need to invent it. Otherwise none of us, none of us would have the strength to face these challenges alone.

The European Union has always been much more than a common market, even though we haven’t had a United States of Europe. So if the sovereign debt crisis has strained European unity, here again we can make this crisis an opportunity. Deeper integration, deeper understanding, greater oversight and control.

For example, surely Greece, a small country with a GDP not much bigger than the German state of Hessen, cannot be responsible for rattling the very foundations of the Union.

Had the European Union the institutions of oversight in our common currency, we would never have had a deficit exploding by 30 billion over our budget targets, or 15.4% deficit.

Today if we are off in Greece one billion, we are in check. But there are further problems we must face.

More Greek or Irish or Portuguese or Italian fiscal discipline alone won’t end this ongoing crisis, because the sovereign debt crisis has underlined the competitiveness differences between the eurozone economies. Our differences in economic performance were either hidden in the past, and in the past this allowed us to borrow rather than to become competitive.

But today these differences have become a liability, and make the cost of borrowing heavily unequal between countries and unsustainable for many.

So again we need to make this crisis an opportunity. We all need to stop the cacophony and work more in harmony. We European partners must finally stop blaming each other for collective or institutional failings, and acknowledge that no European nation will thrive in isolation.

Even Germany depends on Europe, its biggest trading partner, for growth and jobs. I don’t need to remind the industrialists among you that more than 70% of German exports go to Europe.

We must develop Europe-wide strategies for new growth, green growth policies that will guarantee our competitive advantages and create jobs, tackle acute inequalities both in and across our countries, support European ideas such as the financial transaction tax or the CO2 tax, further integrate our own resources.

We must forge ahead immediately, not muddle through, with the institutional reforms necessary to resist intensifying pressure from financial markets, but also growing competition from the rest of the world, whether it’s from the BRICS or elsewhere.

A solution is certainly within reach, if we can all muster the political will. We must stop blaming each other for our different weaknesses, and unite together with our different strengths.

Yes, each of us, different though we may be, we have many strengths. And we can only develop them if we work together rather than against each other.

The eurozone must now take bold steps towards fiscal integration to stabilise the Monetary Union. Let’s not allow those who are betting against the euro to succeed.

Shoring up our institutions so they can withstand financial shocks is an essential investment in Europe’s long-term security.

Along with much tighter fiscal oversight, we need to expand the EFSF and formulate permanent mechanisms for economic stability and solidarity.

You, Mr. Keitel, have also called for a European IMF.

On July 21st the leaders of the eurozone agreed important steps in the right direction. This agreement is important for our European future. For Greece, it gives us the breathing space for our reforms to yield results. It will create a more sustainable debt cycle by locking in low interest rates. And it will support the recapitalisation of Greek banks during a deepening recession.

The success of the agreement depends on three things: First of all, private sector involvement, a huge, voluntary and unprecedented deal involving hundreds of banks and financial institutions around the world.

Secondly, the ratification by all 17 national parliaments of eurozone members. Our decisions must have democratic legitimacy. In order to convince our constituencies of the merits of the agreement, we need to explain the pros and cons very clearly.

And third, Greece must fulfil all its commitments, according to the terms and targets set out in our initial agreement with our partners in the Troika.

Of course I cannot guarantee the first two components of the agreement, but I can guarantee that Greece will live up to all its commitments. I promise you, we Greeks will soon fight our way back to growth and prosperity, after this period of pain.

Of course it is unrealistic to expect any society to make such fundamental changes without a reasonable period of transition and adjustment. As Chancellor Angela Merkel recently stated, you cannot change a country overnight. I am sure she was speaking from her own experience of the challenge posed by the reunification of East and West Germany.

You know much better than I do how difficult this achievement was. You know how hard it was to overcome scepticism, fears, prejudices that this courageous move entails. And yes, there were costs involved.

Yes, there were many social and economic challenges to be overcome. Yes, it took time to adapt to the radical changes that came with reunification.

But ultimately reunification was not just in the interests of East and West Germans. It was in the interests of all Europeans, because for Europe it was a giant leap closer to peace and security. It was a giant leap to building a European society capable in dealing with the new global frontiers humanity is facing, as we are pooling our sovereignty, to be stronger, not to be weaker.

These challenges are too big for us to hide behind our nationalisms. In these challenging times we need a political discourse, a political spirit that says: I am proud to be German, as I am proud to be Greek, as I am proud to be French, to be Spanish, to be Dutch, to be Polish, as I am proud to be European.

And this crisis must unite us, to make Europe a stronger Europe, one that lives up to the common aspirations of our citizens.

I am confident that in a few years will have undergone the same remarkable transformation achieved in Germany during the early 1990s.

What we are doing is nothing short of the rebirth of a nation. And your contribution, as dynamic members of German industry, can be crucial.

I invite you to Greece, a Greece which is changing, a Greece worthwhile of your investment, an investment in a future which will profit us all.

Dear friends, the fall of the Berlin Wall heralded the end of a divided Europe. Now is not the time to rebuild walls in Europe. Europe must keep moving forward toward permanent integration, built solidly on social justice and sustainable growth.

That is what our citizens want and expect, and what our history demands of all of us. Thank you very much for your attention.

>> Photographic material.

Your Reverence,

President of the International Fair,

Representatives of economic and social partners,

Ladies and gentlemen,

I would like to kick off with two questions:

1. Is there a single Greek citizen who does not believe we can do it? That we will eventually make it? Is there anyone who thinks that Greece does not have natural resources, human resources and significant prospects? I am certain there is none.
2. Is there anyone who does not see that, for some time, we have been building castles in the sand in the most carefree manner instead of capitalising on our edge? Have we not forgotten about our fellow human beings in the meantime, the value of making collective efforts, and working hard on our own? And thus, unwillingly, have we not undermined our future as well as our ability to stand on our own two feet?

Let us for a moment put aside any MoUs and whatever agreements that may have been made. Is there anyone who doubts we need to at last change everything for us to survive and build a better country not because some foreigners are forcing us to do so, but rather for the sake of our national independence, our dignity and for our children’s sake?

Is there anyone who doubts that Greece needs to stick to its European orientation and stay within the Eurozone? I am certain we all know where we are and how we got here. And I am also sure that we all believe that, in the end, we will win this battle.

About two years ago, our people asked that we set the creative forces of our country free from burdens. The people asked for a revolution. The revolution of the self-evident so as for us to proceed with all those great changes that would allow the country to utilize its great capacity in a productive manner.

This is what we are doing. This is what we are striving to do. This is our objective: for us all to break free from all confining horizon of our micro-world and to look after our joint interest and what is best for all. That is where the great reforms that have already happened and those that are about to come are leading us. It is an uphill road through global turmoil.

Our first priority is to have a steady course, and save the country from default. The problem is huge. After 2004, Greece’s debt skyrocketed to unprecedented heights. It actually got to a point where it was by far many times higher than the revenue our country could possibly generate within a year. As a result, we ended up borrowing ever bigger amounts, mostly from abroad. Our dependency went on growing and so a ‘mortgage’ was taken on the future of the next generations.

And of course, this debt did not happen by itself for it is due to the deficit. It was due to a deficit that followed a crazy course in the years that preceded 2009. In 2009, it was over 15% of the country’s revenue, exceeding the sum of 36 billion euro in just over a year. This was a deficit due to mismanagement, irrational spending, clientelistic and patronizing policies and in violation of any notion of proper management and administration.

The proof lies in the course the state revenue and expenses followed. Public expenditure went over the hill and revenue shrank. The gap grew more than ever before in the year 2009. State expenditure grew: from being 68 billion euro in 2004 it got to 112 billion in 2009, not counting the interest in.

But, dear friends, this was not the only problem. The incredibility of our figures and statistics was also a problem. The year 2009 started with a budget that foresaw deficit at 2% of the GDP. We ended up gradually unearthing a deficit that was more than 15% of the GDP which means a gap of 30 billion euro.

Thus it dealt a critical blow to our country’s credibility. No one believed in Greece any more. People started disputing the capacity of our country. They stopped entrusting their money to our country. No one wished to lend us any longer.

Certainly, deficits and debt were no more than symptoms of a deeper and multi-faceted crisis which was due to the fact that:

· Greece was borrowing more than it could possibly earn.

· The state was spending a lot and throughout

· There was lack of transparency

· and lack of lawfulness

· along with a huge justice and equity deficit.

· and a banking system which was managing social wealth and resources but not always with a transparent and productive manner.

The promise we gave in 2009 was that we would change all of that. And this is what we are doing, even if mistakes may be made on this strenuous path of an unchartered course. Still we remain unfailingly committed to what ought to be done for our country to change.

And still nothing could have been done had we found no solution to the problem of our country’s financing. We made the decision to:

o To fight hard to avert default, which would be detrimental and destructive for the country and the citizens.
o And to stay in the Eurozone.

And this meant and still signifies tough decision-making. It meant and still means sacrifices that are necessary, in a spirit of justice indeed, but still sacrifices.

We heard a lot on magic solutions and even conspiracies. It was easy- and convenient for some, to turn a blind eye to reality. Nothing was, or is easy, which is why we gave and are giving, jointly, this giant struggle, while making serious negotiations. In every decision we make, in every negotiation we had, we took the national and collective interest into account. And so we are, step-by-step rebuilding Greece’s credibility.

Last spring we managed to get a loan for 110 billion euro as we all made one collective effort together, and everyone made sacrifices. Without this loan we would not be here today talking of what we are talking about. In March 2011 we managed to get an extension in terms of paying back those 110 billion euro and managed to get the interest rate to drop and, then in July, we managed to get the defining and important decisions the European Council made.

These were historical decisions, first and foremost for Greece, but also for Europe itself as it made a step in the direction of enhancing cooperation to establish new tools to manage the debt crisis even more in Europe.

These were the decisions through which we managed to:

* Cater for the greatest part of our country’s borrowing needs through 2020 instead of the year 2014.
* Have our obligations shrink considerably in the years to come, by extending the debt payment period to 30 years instead of 5.
* Keep the loan interest rate steadily below 5% on average which means many billions less to be paid in interest which the tax payers would have been called upon to pay in forthcoming years instead.
* Have the private sector participate in these efforts and as a result the net public deficit dropped in nominal prices by 12% of the GDP, i.e. 26.1 billion euro.
* Afford to repurchase our debt through the mechanism and at lower prices.

These decisions were unique for Europe and its history. This is an effort we do not have the right to leave unfinished or else sacrifices made will go to waste. They will not be in vain. And as far as we are concerned, we are fully committed to fending for this agreement in every way.

Our top priority is to fully implement decisions made in July not only because we committed ourselves to doing so vis a vis our partners but also for the sake of our national interest. We will bring this effort to a successful close.

We shall rise to the occasion and this historical challenge that lies ahead by making all the big changes our country has been in need of for years. We are determined to do so and this determination of ours we showed in last Tuesday’s Cabinet meeting. We shall also make all other decisions that may be needed and we shall do what it takes to make sure the country stands on its own two feet; we shall do that in terms of absolute self-negation.

And even if this year’s recession is obviously worse than what international organizations originally expected it to be in the first place, and those were the estimates the MoU counted on, Greece will nonetheless achieve its fiscal goals by doing all it needs to do to that end.

· Because this is the only way for us to get to have primary surpluses and not deficits.

· This is the only way to protect the country and our children’s future, given the efforts and sacrifices the Greek people have been making throughout these past months.

· This is the only way to do away with negative stereotypes, which unfortunately are there at the expense of Greece worldwide.

· This is the only way to have a strong voice in negotiations and have credibility as well as prestige abroad.

And I wish to be clear: whenever we opted for making discounts or we may have backtracked, this backfired on us. Given the point where the Eurozone, Europe and the global financial system are right now, any delays, any mood swings, any other choice, other than abiding by our commitments to an iota, is precarious and risky for the country and its people.

Greece will honor its commitments. We are not going to let Greece become a scapegoat for problems, be they institutional, or of political populist nature or because of any other issues there may be in Europe.

I know that this is a very tough time for everyone. I am well aware of what it means to low and medium income families as incomes shrink and businesses are striving to make ends meet while recession causes desperation and joblessness. Our people are being tried.

Average working-people, business people, self-employed people, hard-working people who are conscious taxpayers and respectful of the law are now going through trials and tribulations. And it makes sense for people to wonder: is there hope? Will Greece make it?

Yes, there is hope. Yes, we will make it. Yes, we will pull through, Greece will make it. But finding a way out of this crisis does not mean there will be no effort involved, for this is going to work only if we work together. We are working hard to make a change in the productive model and this presupposes making overall, radical changes.

The whole debate on growth cannot be an abstract one; it is not a mere motto. Growth cannot happen because someone gave an order; it calls for preconditions. And as we just said the first and foremost precondition is to have fiscal consolidation and make sure there is renewed trust in the Greek economy.

Who is going to finance growth should we not make sure that banking institutions have access to global capital? If deposits do not return home-and they are coming home to now indeed? If investing in Greece is not a sure and safe investment? So, fiscal consolidation is the prerequisite.

And everyone is agonizing over it. It is certainly difficult but of course we can and will do it. Already -and this is an answer to those who doubted us

* In 2010 we managed to get the deficit to drop from 36.6 billion to 24 billion.
* This was the biggest deficit decrease within the Eurozone.
* We managed to achieve more thanks to shrinking expenses than through higher taxes
* Primary expenditure- that is state expenses, dropped by 10 billion euro.
* And this happened mostly through not wasting money, which means that out of a total of 10 billion euro, 3 billion regarded salaries and pensions and the remaining 7 billion were about other types of expenses we managed to contain.

The fight is not over. Nor am I going to claim that there is no more scope for correcting mistakes. There is a long way ahead of us, but we are on the right track, not only as far as fiscal consolidation is concerned but also in terms of achieving such growth that would allow us to count on our own capacities.

A productive Greece signifies a country that is synonymous with quality and competitiveness. Can we do that? We most certainly can.

* Already, as of this year’s first half, our exports grew by 40%, which is record-breaking. This happened exactly because we all worked together, Government and Exporters.
* In the tourist industry we entered new markets and this year we are aiming at breaking all other previous records we set in the past.
* Green energy is being put to practice. From 1500 ΜW in green energy at the end of 2009, this year we are going to get to 2500 ΜW.
* Already, the negative balance in agricultural products is changing as exports grew by 25% in the first four months of 2011.
* We negotiated and managed to get solutions so as for EU funds’ absorption rates to increase while beefing up our country and the State through getting the necessary know-how.

And so we shall proceed and continue to work collectively.

A productive Greece signifies a country where creative forces and elements are no longer bound by impediments that used to be. Can we manage to have an investment-friendly environment? Of course we can by working together: the Government, creative entrepreneurs and agencies in unison.

* Already, businesses can be established within a day.
* Through the collective efforts of various Ministries, we drastically simplified environmental licensing procedures.
* We are changing the way construction licenses are issued.
* And for the sake of protecting the general public’s interest we shall not reconsider opening all closed professions but will go through with it.
* According to the annual OECD report on Greece, our country now ranks higher by 14 on the list of the Organisation’s members as far as business environment perceptions are concerned. In terms of transparency alone as well as in terms of simplifying the regulatory framework, our country now ranks 9th as opposed to 23rd last year, thanks to the One-Stop-Shops for businesses.

The truth is that our economy was captive to a state-oriented, clientelistic system. Markets were barricaded by all sorts of vested interests: starting with sectoral ones, and all the way to big economic and political interests, which were binging on the state treasury and funds, manipulated states-people, media and reporters alike, and thus managed to impose their own private agenda in public debates and dialogue too.

This is what we are fighting against. This is of course a field where we are constantly coming across continuous resistance. And that is where and why we need every citizen to fight with us. In this fight we are going to make no compromise. We are tearing obstacles down, liberating and capitalizing on our competitive advantage and our own wealth.

Dynamic privatization schemes will create great investment opportunities. Privatisation schemes are not merely a simple way to cut down on our debt. They are a fundamental tool for growth, and having jobs that will not be a burden for the state budget and which will contribute to generating new wealth so that the state be able to fund and finance all necessary infrastructure citizens need.

We are making an about-turn everywhere by utilizing the edge we have because to us a productive Greece means turning the tourist industry into a champion for growth and development. Can we do it? Of course we can by continuing to work collectively and with passion, by pursuing cooperation we have already began, and that means by making the teaming-up of the private and public sector even deeper.

* Together we turned to new markets such as Russia, Israel, Turkey, Serbia and together we are expanding them. Now we are aiming for China and India and wish to get more people from the States interested.
* Together we are promoting and creating new tourist products which so far did not exist in our country.
* Together we are upgrading quality/price ratio.
* We are simplifying licensing procedures for tourist businesses.
* But we need to work together as well to ensure that tourism which is currently plagued by uninsured foreigners becomes a model for fostering new jobs for Greek women and men.
* And together we shall make sure that tourist residences and relevant real estate will grow while fully respecting the natural environment.

A creative Greece signifies a country where there is a fresh breath of air in agricultural production and animal farming. There is quality in agriculture and animal husbandry. As of tomorrow, young people who wish to exercise the farmer’s profession while working on qualitative farming may be part of the new process to get land assigned to them. This process involves at least one million stremas.

* Each Region, together, determines its own agricultural identity by defining its product basket.
* Our objective is to turn the negative agricultural balance into a positive one.
* We are changing clientelistic cooperatives into real collective agencies for the sake of all the farmers’ interests.

A creative Greece signifies a country where we take advantage of our untapped and inactive resources, such as energy resources. Can we do it? Of course we can.

* We gave approvals for investment projects for green energy. Once implemented their energy capacity will in total exceed the national objective we set for the year 2020.
* I am formally announcing that Greece is starting research drills for oil and natural gas in the Ionian Sea and the area south of Crete and the official decision for the respective tender is to be signed shortly.
* We deregulated the market for electrical power and natural gas. This wealth belongs to all Greeks and it is now being taken advantage of for the sake of our common interest.

We are moving forward along this path:

* Through project «Helios», we are making Greece a pioneer in terms of solar energy production which is due for export to N. Europe. Already there is apparent interest for such purchases from Germany and we are looking forward to investment projects worth over 20 billion euro which will in turn foster employment for thousands of young Greeks.
* Soon we will be dealing with the first marine wind farms.
* Through privatization projects for DEPA, DESFA, Hellenic Petroleum and the PPC we are introducing new capital and know-how.

A creative Greece signifies a country where the natural environment and out culture can turn into competitive advantages. Can we do that? We can and we are proving so every single day.

* We have completed drafting the first ever forest maps for Greece.
* Natural reserves were mapped for the first time.
* We are picking up speed for the Land Register (Cadastre), as well as making spatial and urban plans with every means we have. The absence of the aforementioned both stood in the way of growth and allowed scope for unlawfulness.
* We have planned for great, qualitative, cultural projects in Athens, Thessaloniki and other urban areas with a view to improving quality of life.

A productive Greece signifies having at long last a country that supports initiatives for citizens and vulnerable groups. Can we do that? Of course we can and this is the historical challenge we are facing as it calls for changes that need time to be made and which are being made now

- through “Kallikrates”

- through the use of ASEP (the Council for Selecting personnel for hire in the public sector) everywhere

- through having all decisions posted on the Internet on the website of ‘Diavgeia’.

- through having the first e-tenders, especially in the field of healthcare, where the cost for procurements was thus cut down to 1/6 of the previous cost. One sixth! In a tendering procedure where we expected the cost to be 1.2 million euro, we ended up with a price of 200 thousand euro.

- through introducing e-prescriptions we are saving huge amounts of money.

- we have already managed to bring about drastic cuts in expenditure for medications while at the same time cutting prices down.

And we are proceeding with great changes and innovation so that the State may offer citizens with proper services:

* We are merging public sector agencies.
* Reorganizing state-owned media, and among others enhancing the role of Thessaloniki at the same time.
* Public servants are becoming employees of the wider state and no longer serve individual Ministries or Organisations, and thus there is flexibility in using such capacities from one Department to another.
* There is new disciplinary legislation for public servants with a view to putting an end to them going unpunished.
* Introducing the so-called ‘unified payroll’ means that the same type of labor will be remunerated in the same manner.
* We are introducing an evaluation system for public servants.

A productive Greece signifies a country that protects its citizens and guarantees equal rights for all. Can we do that? Of course we can and should do that.

To us, a fundamental precondition to achieve our current and contemporary course for growth is to have and efficient and effective welfare state for the citizen.

* This is why we have already proceeded with making great changes in University education, to make sure Universities are independent, that they serve the needs of the economy, the community, regional growth and each Region’s own identity, setting the youth free instead of letting it wither.
* We secured the pensions of generations to come by means of putting in place a sustainable social security system.
* We rolled out programs to manage unemployment and I have asked that all European programs be checked so that funds which are not being used be immediately put to the use of the state to manage joblessness.

In these tough times we ought to achieve our clear objective which is to have social solidarity. My main objective at this difficult time is

* To make sure there is at least one working person per family and household and make sure there is not one single family without an income.
* This is why we are radically changing the vocational training and education system for the unemployed and we are offering every citizen and all of the unemployed a chance to choose what they want to be trained in and which field. Next the State will help out by providing the unemployed with a coupon to cover all expenses for the trainees and for them to attend a course at an Vocational Training Institute (ΙΕΚ) or even get a university postgraduate degree, or maybe attend a Technical College (ΤΕΙ) or a crash course in a state-certified private college.
* Unemployed young people as well as people with disabilities and women will be given a second chance and we are thus earmarking over 3.5 billion euro to have programs and projects giving every single one of them a chance.
* And we are of course moving forth with new legislation on drugs and addicts, which is also a sensitive issue. Our purpose is to treat and not penalize or incarcerate the users.

We are pursuing our initiatives for citizen support:

* At last and for the very first time we are having a primary health care system for all of Greece through EOPYY, the National Organisation for Health Services Provision.

Ladies and gentlemen, all the aforementioned examples which at the same time constitute a set of objectives so as to have a productive and creative Greece, will mean next to nothing if we do not fight lack of lawfulness and should we not build a state where justice and the rule of law prevail.

I know that there is an issue which indeed concerns and worries all of us, Greek men and women. It is that of extensive unlawfulness which tend to dominate our country and prevailed in recent decades. Our country’s growth also depends directly on having the right laws and properly implementing those laws so that justice be done and there is no scope to refuse doing justice.

I am not about to claim that we got solutions to everything in this field either. This is a field where we are fighting the biggest battles. There is a lot that still needs to be done to break the vicious circle of illegality and to do away with the conviction that some entertain as they believe that this is a country where everyone may do as they please and they will eventually go unpunished for there is no one to answer to. A long way lies ahead; yet, we have already launched a big venture and we are not going to tolerate any illegitimacy whatsoever, regardless of who may be involved.

First, we are moving towards a new National System for Taxation. We are fighting tax evasion even harder. No matter how difficult this fight may be, after decades of twisted operations, this is the first Greek government which is determined to fight to the end.

We certainly need all Greek citizens to be determined to do so. It is not for fiscal purposes alone but it is also an issue of social justice and equity. We cannot tolerate having Greece with two rates and types of citizens.

And actually a few days ago we made yet another step which no Greek government had ever dared to take before: we publisized the names of businesses that own significant amounts to the Greek State. This was a first step but this also is proof of our volition. And we will continue to do so, rest assured.

* This is what we did and continue to do for Greek soccer as well.
* We also started implementing the relevant legislation so that people who owe the State are forced to pay their dues.
* We cancelled agreements and contracts more than 350 physicians and pharmacies had with State social security funds as it turned out they dealt in illegal prescriptions.
* Recently, actually a few days ago, we made arrests on the grounds of illegal transactions on oil.
* We are unfailingly and without exception reviewing benefits and allowances given to people who claim they are handicapped but are not really entitled to get them.
* Over twenty thousand such pensions have already been cut and more than 400 such cases are being investigated by the state prosecutors and will be tried.
* As of the start of September 2011 the relevant Center, in charge of determining who is truly handicapped or not, began its operations.

You might suggest that all of the above go without saying and that they are self-evident. May be they are, but until recently they were not as far as our country was concerned. In the past, nothing had been done about all that. Now at last something is being done and the number of citizens who will no longer tolerate those who have been turning a blind eye to the law and went unpunished while stealing from the State and deceiving the community is growing.

If all of us may be were part of this system, today, we all need to change. This is an era when everyone is going through tough times and we will not tolerate such behaviors.

Pretty soon we are also going to go public with the names of natural entities, not just businesses, who own significant amounts of money to the Greek State. It is not acceptable that today pensioners and employees pay their taxes and that there are still some people who owe hundreds of millions of euro to the state but they still go unpunished.

In the past Greece also excelled though its prosperous citizens who benefited the nation. They made a fortune by working hard abroad and against international competition and next they brought the fortune they had amassed to their motherland so as to help Greece and their fellow country people.

Hopefully prosperous and wealthy Greeks today will feel the need to help this country which allowed them to earn a lot and possibly they will follow in the footsteps of their counterparts elsewhere, i..e those rich people who recently said ‘yes, we are willing to pay higher taxes’.

In any case, we are not stopping here. We are changing everything as regards the country’s institutional framework. We will do no favors. We will wage our wars. We are not opposed to social groups but we are against practices, mentalities and perceptions which are harmful and insulting to us all.

* We are changing the disciplinary code of the public sector even if there are some that are objecting and reacting to it in the name of unionist practices as for years on end there were having transactions with public servants who broke the law.
* We established a new institutional framework so that cases of corruption involving state officers be brought to a speedy trial.
* We are working on drafting various bills of law so that justice be done faster.
* Legislation is being codified.
* Procedures are being simplified and justice digitalised.
* In line with practices we have already put in place for checking on ministers, MPs and mayors, now court officers as well as company shareholders who publish dailies or periodicals or anyone who has a license for TV channels or radio stations have to tell the State exactly where they got their money from.
* As far as politicians in our country are concerned, there will be an end to the moquery of lapses through the next Constitutional reform.

A productive Greece signifies a country where there is a political system which rises to the expectations and protects the rights of its citizens, one that serves the public’s interest and only that. Can we do that? Of course we can. And we are doing so right away:

- through the law for electoral expenses.

- by broaching the issue of constitutional reform.

- by enhancing our democracy with a new framework on referenda. The Greek people will thus get to air their opinion on all great issues. There will be no issue that may be considered taboo.

- We are establishing and increasing rules of transparency as regards political party financing and auditing the source of income for states-people.

-  There will be a new election bill for Parliament to discuss shortly.

Yet this does not suffice. When there is mention of the «political system», normally, we think of civil staff. It is more than that. There is also the media, anonymous sponsors, great vested interests as well as petty and unionist interests which are pillaging the public sector.

In order for our Democracy to move forward we need renewed commitment. This is my objective. Moreover, in order for our democracy to move forward, it needs to be respected. The laws of our republic must be respected. No one can or may dodge them. And yes, eventually, we will be able to build a state of lawfulness and justice that way.

Ladies and gentlemen, dear friends, all these examples are drawn from Greece, a country that is fighting and changing. Let no one assume that I am not well aware of how great the difficulties that every Greek family is faced with are. It has been two years we are fighting to make a change for our country.

You may feel like blaming me for a lot. And those who know me also know I am receptive to criticism. I am not infallible. But I am fully committed to this national effort of ours. It is for the sake of our shared future and joint interests.

And this is a road of no return. It is a path that is not easy but rather replete with obstacles, which are often quite big and at times they are not even obvious.

* Whenever we try to shed some light on corruption cases we realize Justice is slow.
* Whenever we try to introduce bills of law to help the State change, Public Administration is taking its time in adjusting to the new era.
* Whenever we unblock the road and set creative forces free, quite often there are reactions on the part of sectors and groups which had been comfortably settled in their ways for years and which are now losing prerogatives they used to have and which they preserved at the expense of others.

Still, I am determined to clash with everything that is giving Greece a hard time, everything that stands in the way for the future. Our opponents are all those who are trying to preserve mentalities and notions which got the country on the verge of this cliff and potential demise.

And this fight for change is not going to be an easy one. Those of us who are committed to fighting for change should not give in and the reason why is simple:

· I know, and we all know, that Greece is worth so much more and that it deserves better.

· We know that those who are denigrating us are not doing us justice.

We can prove they are wrong and we shall do so. We will refute those who are currently denigrating Greece, those who foresee its failure. We are going to prove them wrong.

Ladies and gentlemen, in 2009 I committed myself to making changes and turning everything around:

* I committed myself to supporting the creative efforts of the Greek people.
* I committed myself to fighting injustice of all sorts.
* I committed myself to creating a country that knows its worth- Greece that would be able to make it.

And back then I said I am making the first step to rebuild a relation of trust and confidence between the citizens and the political arena, so that the latter serves the people and does not oppress it, so that the State be friendly to the people.

I did that and shall continue to do so in the next steps we are about to make. Bringing back reason and logic, carrying out the revolution of the self-evident on a daily basis all constitute our weapons and tools so as to construct a new and different country for all, but mostly for the sake of our children, the youth of today and generations to come. It is the young people that I wish to address today in particular.

As I look around this hall I notice people from my generation. Indeed we did our part but we are also part of a generation which bequeathed the next generations with huge burdens. We owe our youth a different fate. We owe them, first of all, the right to manage and determine their own destiny themselves.

Today, our own generation is still the one calling the shots in this country’s social, political and economic life. This is unheard of the world over, as in the rest of the globe people in their 30s and 40s have for years been in charge and at the helm of developments. And so our duty is to give the next generations time and space to breathe and grow, so that we let them use their own creative forces which we are in need of.

I am aware that there are many young people who wish to leave the country and go abroad in search of a better future. I can understand that. And in the past there were several of us were forced to leave or were even exiled. I am asking you not to give up on this effort to change Greece for

* The country needs you.
* And Greece can change; it will be a different country in a few years from now.

Yet, this is not going to happen if you are gone. What I am asking of you, the young people, is to stay and fight together with us because you know the potential a country like Greece has on the global arena. You know better than anyone else that Greeks are just as good as any other people. Just as long as we work together, and work with a view to achieving our shared goals we will make it.

This is the reason why I am asking that we all be there, everyone who believes in the strength of our country and our capacity. Let us all contribute to this effort, wherever we may be working at. If every one of us makes one step in contribution to this venture, then our country will be making ten steps ahead.

I am asking the banks to respect the support the state and the people have provided them so far in the form of guarantees. The state is supportive of the system but the bankers need to support their banks themselves as well.

We decided that any bank that may need capitals may receive them through the state in the form of common shares so that the cost for its rescue be shouldered by all Greeks and taxpayers in general.

I am asking this country’s businesspeople to believe in Greece and invest so that they set their own example and thus retort to those who are pulling their money away from our country.

I am asking all self-employed people to pay their taxes, and not justify those who evade paying taxes and social security fees thus making the state poorer and making illegitimate profits unlike their law-abiding colleagues and counterparts.

I am asking museum guards and personnel, the taxi owners, port and dock workers to realize they are more than just average working people. They are the image of our country.

I am asking our farmers to turn in the direction of productively utilizing the advantages every region has to offer and that they become extroverted and search for new markets for our products.

I am asking the public servants to stand by the citizen, pay heed to any case they might be in charge of and that they encourage and create a new culture for services provision that will not count on laws or fear alone but mostly count on the will to work and assist.

I pay tribute to those honest, capable and hard-working public servants. They are working under difficult circumstances and conditions. They are the main lever for reforming the Public Administration.

The healthy and robust forces of our society, which the overwhelming majority, wish for Greece to change, for it to become more just and productive.

I am asking all the political parties to opt for a responsible stance vis a vis the fact that the people are now agonizing over this critical point in time. Let parties draw a lesson from our history and our mistakes. Let us have a new, healthy and robust political system in this country.

I am not the one making this appeal. It is our country. This is an appeal for us all to work closely together so that this crisis may turn into an opportunity and make changes. These will be changes for the best. Destruction and demise can neither be nor will they be an opportunity for anyone. Should there be anyone who such a prospect appeals to, they are making a huge historical mistake.

It is time that each and every one of us assumes their respective individual responsibilities no matter which political party they may be affiliated to, or the parliament seat they may have, for we have no right to keep silent any longer.

Let us put our differences and petty ambitions aside. Let us all give this common fight steadily together from wherever we may be: our posts, our work place, our neighborhood, the media we may be working for.

So that those who wagered and still bet on Greece opting out of the euro will be faced with all of Greece which will stand up against them. So that those who are hoping that once the country leaves the euro they will buy the country, its enterprises, the land and the labor force for peanuts realize that every Greek man and woman is standing firmly against them.

And those who are wishing for the country’s demise to save themselves as they have been pillaging the wealth of the state, robbing their own companies, stealing from the social security funds, insisting on investing in an ailing yesterday, will have to face all of us who are looking forward to a better future.

We cannot allow for such plans to materialise. We will not. And in order for us not to allow them to happen we need to stand by the side of each other and not stand against one another. We need to make sure each and every one of us understands how significant the size of individual contribution is, and help turn this land into what it deserves to be.

Dear friends, ladies and gentlemen, I will continue to strive hard for all of the above and for everything that will make this country, its society and each individual stronger.

I will fight for making Greece productive and creative. I am inviting all of you to fight to that end together with me. For I will fight hard and make no compromise, and I am urging all of you to fight against all that is not good and well-functioning, against license and corruption. Let us fight without gauging individual costs but rather consider the collective gains.

A while ago I said: I am not here for either this post or to get reelected. I am here for us to succeed, together. And I can promise you that together we are going to succeed.

Thank you.

>> Watch the video.

>> Photographic material.

Thank you, Andrew. Ladies and gentlemen, friends and colleagues, let me begin with a story, a small story but real story.

Only a few days ago I asked my Finance Minister, Giorgos Papakonstantinou, how deep our recession seemed to be this year. He said, “I can’t tell you until our independent Greek statistics authority announce the figures.” I replied, “OK, but surely you have an initial indication from them.” He said, “No, I don’t.” I said, “Well, ask them.” He replied “I have. I have asked them.” So I asked, “What was the result?”

He said “They have decided that no one, not even God himself, will get a preview on the statistics before they are officially and publicly released, not even finance ministers will in the meantime.”

And so it was. We waited for the 2011 first-quarter figures on our economy, as did everyone else and we received the results on Friday, at the same time as everyone else in the world did.

Yes, we have an independent statistics authority in Greece. Some might say so what? Isn’t that supposed to be self-evident? It is, but it represents a sea change in our country. Actually, we may be frontrunners, compared to many other countries, even in the developed world.

But that is why I call what we are doing in this country the revolution of the self-evident. It may sound easy, but in fact it is painful.

Last year our 2009 deficit was revised from 6% of GDP to 15.4% of GDP. That is painful. Transparency is painful. But it is a necessary prerequisite to know where we are, where we are today, to begin the difficult journey – we have already begun it, of course – to a better and more viable economy and society, and repair so much damage that had been made.

I see this revolution of the self-evident having as its basic goal to create trust and regain our lost credibility, create the trust we need in our institutions, our capabilities, our own selves, to regain credibility we lost amongst our partners, our investors, the credibility our citizens want to see in government institutions.

So tonight I would like to make five points, five comments on, first of all, on where we were a year ago. Secondly, why were we in the situation we were in at the time? Thirdly, where are we today and what have we done to get here? Fourthly, where do we need to go? And finally, how are we going to do this?

Where were we last year? Well, we all know: there was a huge deficit, a huge debt, a huge deficit in current accounts, lack of competitiveness. But most of all, the biggest deficit of all, was a lack of credibility.

Why were we in this condition? This is the second point. Greece has had and still has great potential.

Let me quote what I said a year ago in a speech to bankers in Vienna. I said, “The Greek economy is no poor economy. It was a mismanaged one.

And if I translate that to the reality on the ground, it meant a political system built on clientelism, patronage, inequality and injustice, captive to special interest groups with special privileges, and along with it a huge, over-centralised, inefficient and bureaucratic state, lacking transparency, meritocracy and accountability.

“This in turn allowed for growing graft, which not only undermined public trust, but hindered entrepreneurship and also wasted taxpayers’ money along with investors’ time and patience.

“Huge costs are accrued, for example, in the hospitals because of corruption and lack of transparency in their management. And the welfare system, where 40% of all total health and education expenditures are paid out of personal income of Greeks, not public monies.

“This created a culture of tolerance towards tax evasion, and in no way helped foster civic responsibility.”

That is what I said a year ago. So we knew and we know our problems. And I am happy that both the European Union and the IMF are coming to an understanding of the deeper challenges we have, where our deficit and our debt are indeed a major burden, but they happen to be symptoms, not the cause.

We obviously have to deal with the symptoms, as they can be grave enough to create havoc.

But even today, if there were a magic wand that would make these grave symptoms of deficit and debt disappear into thin air, we would still be up against a huge challenge, one of making structural changes, changing practices, even attitudes, changing our public civil service and sector, making our economy both viable and competitive, moving into a green and sustainable economy, investing in our comparative advantages.

Otherwise, in only a short time we again would be in deep waters, with new deficits, with new debts.

Yes, we knew, if not exactly in statistical terms, still we knew and still are aware our problems. And certainly we are not going to tolerate concealing them, because this was a cardinal sin.

And we are being more self-critical than anyone else outside Greece, because we know we need to change and because we want to change.

We, in Greece, our government and I, are all committed to facing up to our responsibilities and are doing so in the best of ways.

Yet, we all know that this problem is not only a Greek problem and this I have said that much long before Ireland or Portugal became recipients of help and decided to implement a robust programme for change.

We have all lived through the rollercoaster experience, the sense of terror of the 2008 Wall Street collapse. There was nervousness, worry of what may be around the corner tomorrow, fear, panic, and even hysterics.

And there was much debate worldwide about how we regulate the financial sector, the causes of the fallout in 2008 and who is picking up the check. What are the rating agencies doing? How do we create sustainable growth?

We all share a common challenge. We, humanity, all of us have unleashed or created amazing capabilities, be they in finance, energy, nuclear energy, bio- and nanotechnology, communications, informatics, astounding innovation, research and human knowledge.

Yet our institutions and we seem ill prepared to use our huge capabilities wisely or to deal with this rapid global transformation.

Ancient Greeks would have called this problem ´´hubris´´ (ύβρις).

But beyond theory and practice, this means that one way or another our citizens want us to restore confidence in their lives, a sense of security, real transparency, with a clear common plan guaranteeing all real participation, a worthy job, a good education, a respectable pension, and a respected voice in decision-making, as we deal with this very complex globalising society.

So this will be and indeed constitutes a national, a regional and a global governance challenge for us all.

We have linked our fates so closely together so that, for example, when ECOFIN, our European committee of finance, with the ECB and the EU Commission decided last year on the EUR750 billion support package, it did so at two o’clock Sunday morning, in order to send a positive message to the markets in Japan just as they were opening up the next day, on Monday.

This is only one example of the intricacies we are facing, complexity that makes our work even more challenging in Europe, which is not necessarily equipped to deal with similar situations, although we have seen amazing steps be made. Maybe they were slower compared to the way the markets react, in terms of creating new institutions which have helped supporting Greece, Ireland, Portugal, and the eurozone in this difficult situation, which we appreciate very much.

We are in this boat together. A monetary union without, however, a coordinated fiscal or economic policy, is the one thing we are trying to fix. We are in this boat together, and I often read articles in The Economist rightly making this point, particularly concerning Europe.

Just some of the titles of the past weeks bear this out: ‘How Dithering Could Wreck the Eurozone’, ‘Decision Time’, ‘Politics Raise the Cost of Eurozone Solution’, ‘Dogmatists Raise the Cost of Eurozone Crisis’.

So as we in Greece are showing lack of trust in our institutions, deep down our own institutions are, one way or another, facing a deficit of trust worldwide as well as in Europe.

The third point: Where are we today, and what have we done to get here? Well, let me take you back to our independent statistics agency. A few days ago, the Greek Statistics Authority announced that in the first quarter of 2011 Greece’s GDP grew 0.8% on a quarterly basis. On an annual basis the economy contracted by 4.8% in the first quarter of 2011, compared to 7.4% in the previous quarter.

On Friday the European Commission predicted that Greece will return to positive growth rates in 2012.

- Exports are growing fast: 35% average growth in exports per month during both the fourth quarter of 2010 and the first quarter of 2011.

- Competitiveness is improving.

- Current account deficit reduced from 14% in 2009 to 11.8% in 2010.

- Tourism and shipping, two cornerstones of the Greek economy, have posted strong growth this year.

Despite higher inflation in other European Union countries and high oil prices, we are seeing inflation in Greece being reduced, slowly but surely. As a Greek TV commercial states “Was this by luck or chance? I don’t think so.”

These are encouraging signs that the country is emerging from recession. It is an important glimmer of hope and we get to see it because we have made a colossal effort in the past months and year.

Bear with me, as I mention some of the goals we have achieved:

- The largest annual deficit reduction ever by a eurozone economy. Government deficit reduced by 5% of GDP in 2010. Cyclically adjusted, primary deficit reduced by 7.2% in 2010, from 9.8% to 2.6%.

- Primary expenditures reduced, as a percentage of GDP, from 47.6% in 2009 to 44.0% in 2010.

- Total revenues increased, as a percentage of GDP, from 37.3% in 2009 to 39.1% in 2010, which is the second largest increase in the European Union.

- Concerning expenditure cuts and tax measures, we had a reduction of public sector fixed-term contracts by 38%, or 29500 people, in 2010.

- Total public sector employment significantly cut: a net reduction of 82,400 people in 2010, or a 10% decline of the total.

- State-owned enterprises: a reduction in deficits by 20% in 2010 and an additional reduction of 35% in the first quarter of 2011.

- In education, we had 1976 schools merged, with a net reduction of 2000 teaching positions and hope we will offer better education in those schools that have merged.

- On spending: From a revamped pension system, we got an overall reduction of EUR3.4 billion or 1.5% of GDP on pensions, illness and pharmaceutical benefits in 2010.

Although deficit reduction is essential to put our economy back on a sound footing, cuts alone are not enough. Our goal is to drastically change the way both the state and the economy operate in Greece. In spite of fierce opposition, and conservative reactionary forces that resist change at all costs, we have implemented a broad programme of structural reforms.

Let me share with you some of the major reforms we carried out in the past year:

- The reform of the social security and Pension system, making it a viable system for the next generation, was complete ahead of schedule. Measures reduced the actuarial deficit to 2060 by 10% of GDP.

- We established an independent statistical authority, as I mentioned: President and the majority of the Board members appointed by a four-fifths majority of Parliament, and full validation of data by Eurostat.

- Stronger fiscal management: Creation of a medium-term fiscal framework, including a parliamentary budget office which controls expenditure, monitoring mechanisms, and binding expenditure ceilings in ministries.

- Tax reforms: New management information systems, alternative tax dispute resolution mechanism legislated, shortened judicial procedures for tax evasion cases.

- Combating tax evasion: Imposed fines of EUR3.4 billion in 2010, which is an increase of 182% compared to 2009. There was a six-fold increase in audits on self-employed professionals, penalties were enforced for undeclared assets. Five hundred and fifty-five yachts were seized. EUR10 million in fines for offshore real estate assets in 2010. Preparation of a three-year anti-tax-evasion plan.

- Local administration reform: Municipalities reduced from 1034 to 325. Local authority entities reduced by 4000, from 6000. Decrease in elected officials from 30,000 to 16,000; 30,000 work positions abolished in prefectures. Fixed-term contracts reduced by 50%.

- Health expenditures: Average expenditure reduced by 30% year-on-year, in the first quarter of 2011, despite the increase in patients. Ten hospitals are being merged, with more mergers planned in 2011.

- Online publication of all government spending, transparency.

- Simplification of new business startups. A company can now be set up in one day instead of 19 days. Fast-track process for large-scale investment.

- Abolition of cabotage. Restrictions in order to boost cruise tourism, one of Greece’s greatest assets.

- Liberalisation of road haulage or truck driver professions. Unlimited licences with fees gradually declining to zero between January 2011 and June 2012.

- Liberalisation of closed professions. The new law is effective July 1st 2011, and covers over 150 professions. With this new law, all restrictions automatically are lifted. The default is open professions. A presidential decree is required only if some restrictions are to be kept, and only if a reason of public interest can be proven.

- Restructuring of the national railway and urban transport. EUR150 million savings in 2010. EUR400 million projected in 2011.

We have established a meritocratic system of recruitment for the public sector, enforcing performance-based monitoring and tougher penalties on civil servants who abuse their positions.

We have succeeded in delivering all these reforms in a remarkably short space of time, and under incredibly challenging economic and political circumstances.

When people tell me that they are impatient for change to happen faster, I ask them to reflect on where we were ten years ago, five years maybe, or even one year ago. Remember no other Greek government has managed to push through so many reforms so fast, and certainly not while contending with such a complex global crisis at the same time.

But don’t get me wrong: We still have a long way to go. But there is also much to be optimistic about. These things haven’t just happened. Every single Greek has played his or her part, making huge sacrifices in this past year.

And I know this is not easy. But our resolve is unwavering, and we will persevere. Our immediate priority is to ensure that Greece has a primary surplus, and I will do whatever it takes to achieve that. This will be a clear sign that we are on the road to deal with our debt.

What we have introduced is a completely different kind of politics, making a clean break with past practices, changing the way the state functions, setting an example for our citizens and other political parties by taking a long, hard look in the mirror, acknowledging past mistakes, and facing up to our responsibilities.

In the past nineteen months we have established a new political discourse, based on transparency and honesty, even when that means telling people things they don’t want to hear. The era of sweeping uncomfortable truths under the carpet is over.

And our goal is to guarantee that Greece is no longer dependent on creditors, even if they are our allies, partners and friends, to indeed be able to stand on our own two feet.

My fourth point: where we need to go. In order to restore sustainable economic growth, deficit reduction remains our priority, both through cutting waste but also promoting sustainable growth.

That’s why we have just tabled an ambitious mid-term fiscal adjustment programme for 2012 to 2015. It includes extensive privatisations, economies of scale in the public sector, minimising waste in public spending, and restructuring our production model.

We will undertake any additional policy measures necessary to ensure that we meet our original fiscal targets we set in 2011.

What is needed to be done from here on? First of all, as I said, a robust four-year programme which guarantees that we are moving, implementing policies and all necessary major changes in our society. This is called technically a mid-term programme, but it is nothing less than a small revolution, one of restructuring our institutions, our society, our economy, one that moves from austerity to structural changes, programmes to fight unemployment, to make and ensure competitiveness and growth. Certainly green and quality growth.

Secondly, in this package we need a clear commitment for the necessary support of this programme from our institutional partners. And finally, we manage our debt.

More specifically, we are finalising our medium-term programme, fiscal strategy. And this is the first time Greece undertakes such a project. And this will bring our deficit below 3% in 2014, and around 1% of GDP in 2015. This will allow us to create a primary surplus above 5% from 2014 onwards, which will reduce the debt-to-GDP ratio and make the Greek debt sustainable.

Our medium-term fiscal strategy will be fully quantified, and all the necessary measures will be completely specified.

On the expenditure side, they will include a reduction in public sector employment of 150,000 people over this period, or a 20% reduction of total, which will be achieved mainly through not replacing people who retire, but also through voluntary redundancies, where necessary.

A new wage grid for the public sector, which is more in line with that of the private sector, fairer, rewarding effort and productivity, and containing wage costs.

Merging or closing down state entities that no longer serve their purpose.

Streamlining, means testing and targeting social benefits to those most vulnerable.

An unrelenting effort to cut waste and reform all of the public administration.

On the revenue side a re-evaluation of tax exemptions, with a view to keep only those that are socially needed or can be justified for growth and competitiveness in areas where we have comparative advantage. We have done this in the tourist industry, for example.

A full-fledged attack on tax evasion, which is an impediment to growth and one of the main causes of social inequality, creating a strong sense of lack of fairness. Certainly we would want a lower tax rate for business, but this we can achieve, as we see greater transparency and as we see that we are truly fighting tax evasion.

At the same time we will announce and push forward our next steps in our ambitious privatisation and asset management strategy. We have aimed for a target of EUR50 billion in revenues, which can cut public debt to up to 20 percentage points.

Equally important, however, we will use privatisations to re-invigorate critical sectors of our economy and boost growth.

We will frontload this process by announcing the reduction or elimination of the stake which the state owns in listed companies, in telecoms, ports, water management, as well as electricity and gaming, bringing forward in time transactions that are mature and will signal the direction which we are taking.

A word on debt restructuring. I know that analysts are talking about it, and many have already discounted it. but we, the Greek government, European institutions and other eurozone countries, all continue to believe that the costs far outweigh any potential benefits for our citizens, for the economy, for the Greek and European banking system, for social security funds, for the eurozone.

So we stick to doing what we need to do in any case: create a primary surplus. Get the economy growing again through structural reforms, and use our assets to reduce our debt. All other discussions seem to be a distraction, and we refuse to be drawn into them.

In the long term our policies are designed to lay the foundations for a much more dynamic, viable and competitive economy, an economy based on innovation, green growth, and high-quality products and services.

Finally, how are we going to do this? First of all, no one should doubt our commitment and resolve. Don’t interpret any difficulties as faltering. We may need time for deliberations. We may need to tweak or even change some of our initial assumptions. We may need to further help and empower a public administration that had never before been asked to perform with such speed, such innovation, such a different approach and attitude.

That in no way changes our will and our decision for major change in our country. Yes, we are changing everything.

And we are doing so during a period of great international turbulence, the global financial market continuing to be volatile.

Just imagine how it would be in your country if, as you are making a small revolution, analysts around the world, experts, or many who recently seem to have become experts on Greece, pontificate and predict the doomsday just around the corner.

This is not the most conducive of atmospheres for change, for investment, for confidence or for hope.

From the international media we ask no more than respect for what we are doing. No accolades, but no trashing. Because again, yes, we are changing everything.

First of all because we came in on a mandate for change.

Secondly, we owe it to ourselves. We know down deep, even when we don’t see much light at the end of the tunnel, that our people and our land have great potential. Our own tradition has taught us from ancient times what it means to decide to take a voyage such as one to Ithaca. We know there are perils on the way, Cyclopes and Sirens, black swans. Yet we know we will learn and become better through this very trying journey.

We are creating a much healthier relationship between the public and the private sector.

Changing our education system, our social welfare system, our health care system, to make it more efficient and effective and serve our people better, give prospects to the younger generation.

In the long term our policies are designed to lay the foundations for a dynamic economy.

How will we do this? Final point. Beyond our commitment, our resolve, our political will, we have our partnerships. And let me say a few words, a short few words, in Greek, because one of the partnerships is the ones we create in our own society, within Greece itself.

The primary necessity is to have a new nation-wide understanding within our country.

Experiences in recent years, the tough reality and truth on our conditions, do not allow for embellishing the situation or offering magic recipes.

They all call for a serious and responsible stance, persistence and commitment on the part of us all.

And this must be communicated and expressed by all, society, business people, social partners and political party leaders alike.

This is a national necessity for us: we have to change Greece.

And indeed show that everyone everywhere understand this.

Our experience, my personal experience over the past year has only strengthened my belief in the need for deeper cooperation in the European Union and internationally. We are facing a common challenge: to strengthen the trust needed between us, to strengthen the trust in what we have already achieved. And it is much, be it the euro, be it our democracies, be it social cohesion, or be it peace on our continent.

Very simply, our challenge is to develop more partnerships, greater understanding of our respective or common problems, and deeper integration and cooperation. In our democracies and our economies, with and between our peoples, we need this cooperation.

The opposite would signify xenophobic rhetoric, easy scape-goating, nationalistic entropy and all these are recipes for disaster for Europe.

So this is a challenge we must, and I believe we can, muster and overcome together.

Let me add one more point concerning Greece and its international role makes it unique in Europe. And it only further proves both our need for close cooperation, but also our amazing potential, which I believe we in Europe have not yet realised, or even understood. Yes, we have underestimated, as Europeans, our potential as Europe.

Over the past year, most of what one hears concerning Greece is the terrible financial crisis. For all our problems, Greece is and remains a point of important stability in this region, a frontline state of the European Union, bringing its values and stability to a difficult and changing region.

We have a key-role to play for European prospects and integration of the Balkan countries into our European family of values. And this is important for stability and peace in the region.

Our banks have heavily invested in the Balkans and are providing both growth and jobs.

We are key in the relation to Turkey and the solution to the Cyprus problem. Our relation with Turkey epitomises the possibilities as well as the difficulties in the relation between Turkey and the European Union.

Greece is close to the biggest, population-wise, city of Europe, and a very dynamic one from an economic point of view for that matter, and that is Istanbul.

And tourism, trade between our countries is booming, yet only at a fraction of its potential.

We are becoming a hub for China and its exports to the European market. Our main port, Piraeus, has been chosen for this purpose, and we, our shipping industry and port authorities, are working systematically towards this goal.

We are an honest broker in the Middle East; where our relations with Israel have improved, while we maintain strong traditional relations and ties of friendship with the Arab world and the Palestinians. We are determined to help peace in this region.

Greece is also part of the contact group on Libya. We are also taking initiatives to find a peaceful resolution to a conflict we all know can have no exclusively military solution.

Greece is becoming a hub for energy networks, with grids already from Russia, Azerbaijan through Turkey, and potentially others from Israel to the rest of Europe.

We also are in advanced stages of providing for important investment in wind, solar and geothermal renewable energy, becoming fast a frontrunner in this area also.

Then we are all facing the amazing changes in the Arab world. Yes, we in Greece knew that democracy was no Western patent or exclusivity. As a matter of fact, one should not forget, and we Greeks don’t forget, the legacy of the Arab and Muslim scholars during the heyday of Arab culture. During the eighth to tenth centuries, there was a massive translation of ancient Greek works from Greek to Arabic by Muslim scholars.

Had these translations not been there, there would never have been Enlightenment, as we know it in the West. The world would possibly not have known of ancient Greek culture, from philosophy to medicine. Many ancient Greek texts do not exist in the original Greek, but are available exist in Arabic given those scholarly translations.

I am only saying this to remind all of deep historical and cultural ties linking the countries and peoples in the region, and thus the liberation of the Arab people will mean an awakening, not only of the past but also a search for a modern identity, as democracy is also theirs, and not a monopoly of the West.

The relation of the Arab and Muslim world with Hellenism coincided with the pinnacle of Arab civilisation. And the rise of the Arab civilisation today will inevitably again revisit the concept of democracy, of its relation to Athens, the birthplace of democracy.

This is not only symbolical. I’d like to quote Jeffrey Sachs in one of his op-ed articles recently published. He says, “It is true that Greece will have to sustain tough economic adjustments for many years, and that the national will might falter. But there are certain cards up the country’s sleeve.

“First, Greece’s debts are more manageable than they seem, because Greece’s hidden economy and hidden wealth of the elites are also much greater than they seem. Money has been salted away for years in hidden bank balances. If that wealth can now be tapped through honest work of the tax authorities, the budget will be brighter than appears possible today.

“Second, and even more important, is the growing role of Greece in the wider world economy. Greece’s new rapprochement with Turkey is not only diplomatic but increasingly economic as well. Two-way trade is on the rise, as are regional infrastructure projects. Greece has also branched out to Bulgaria, North Africa and other neighbours. With rising demand coming from the Middle East too, economic recovery could yield pleasant surprises.”

We are facing many challenges, and certainly democracy is one of them, and we are all in need of this redefining of democracy in the time of social media, rediscovering democracy, its meaning for us in a globalised economy. And this will be crucial for Europe’s relations with its Muslim and Arab neighbours.

These are not lofty goals, compared to the financial challenge we in Greece are facing today. But I believe we can and we will succeed, first of all because we owe it to ourselves, but secondly also because we know we have the potential, and we know we can do it.

Thank you very much.