Prime Minister George Papandreou called on Friday not for a restructuring of Greece’s debt but “restructuring of the country” as his government presented the most ambitious privatization plan undertaken by any Greek administration and a fiscal plan stretching to 2015.
Papandreou discussed the measures with his Cabinet before presenting an outline to PASOK MPs. He said the government would lay out a detailed plan after Easter. “Our problems will be addressed in depth not if we restructure our debt but if we restructure the country,” he said.
“What we are presenting today goes beyond just the fiscal dimension. They are the basic points on a roadmap that will lead Greece out of the crisis and to a Greece that is creative,” said the prime minister.
However, Papandreou remained somewhat vague in both of his addresses about how the government plans to restore public finances to good health. He said that Greece’s target is to reduce spending to 44 percent of gross domestic product by 2015 from 53 percent in 2009 and to increase state revenues to 43 percent from 38 percent over the next four years.
“None of the targets we have set is unprecedented,” he said. “What is unprecedented is the effort we are undertaking to clean up a chaotic situation and return to normality.”
Papandreou defended his government’s record after criticism from various quarters that the pace of reforms is moving too slowly. He pointed out, for instance, that the government had achieved the largest deficit reduction of any European Union country in a single year.
However, the attention of the public, the media and the political world will be on what the government plans to do over the next few years to reduce Greece’s deficit and debt further. The measures that Papandreou and his team are set to announce after Easter will be designed to lead to savings of 3 billion euros this year and 23 billion euros between 2012 and 2015.
Sources said that among the measures that are due to be announced are cuts to social security benefits and auxiliary pensions. Some tax offices and police stations will be merged to cut costs and part-time work will be introduced in the public sector, where one new employee will be hired for every five that leave. New taxes, including further charges for property owners, are expected to bring in almost 10 billion euros.