PM says debt deal is step towards economic recovery
Prime Minister George Papandreou hailed a rescue deal, hammered out by European Union leaders in Brussels early Thursday, to slash Greece?s debt and protect the euro zone from contagion. He said that the pact put the country firmly on the road to economic recovery but he also appealed for the support of ordinary Greeks.
In a brief address to the nation that was broadcast live on state television last night, Papandreou said the deal – which involves banks accepting a 50 percent haircut on Greek debt and eurozone countries offering Greece another 130 billion euros in emergency loans – would allow the country to ?make the necessary reforms without the burden of debt hanging around our necks.?
But Greek people must contribute to the effort, he said. ?Everyone needs to carry out their own personal revolution.?
The premier said the Brussels deal signaled a gradual end to austerity. ?Next year will be the first year that no new debt will be cast onto the shoulders of Greek citizens,? he said.
He noted that it was the banks, not the citizens, who would bear the cost of the change. But the haircut would not create any problems for Greek banks, he said. ?On the contrary, it creates new potential for growth and liquidity.?
Referring to the decision for officials of Greece?s foreign creditors to be based in Athens permanently, Papandreou said this should not cause concern. ?Nothing in this deal sacrifices our right to take our own decisions,? he said. ?On the contrary, it paves the way for freedom from dependency.?
News that the debt deal had been clinched in Brussels early yesterday fueled a widespread sense of relief in the ranks of ruling PASOK. However, many MPs avoided making public statements, partly because the details of the debt plan have yet to be thrashed out. Some of the more skeptical deputies said they feared that the excessively optimistic stance struck by some government officials was not only unrealistic but could backfire as has happened before over the past year-and-a-half.
It is believed that it was to nip such skepticism in the bud that Papandreou called a cabinet meeting for Thursday, immediately after returning to Athens from Brussels, and to have called a session of the party?s parliamentary group for Monday.
In the meantime, top cabinet members – some of whom had been regarded as being critical of the method and pace of implementation of reforms – appeared unequivocal in their support for the government and the deal it reached with its foreign creditors. Education Minister Anna Diamantopoulou described the EU pact as ?a milestone for our country,? adding that ?we must work hard and collectively if the country is to benefit [from the deal] to the greatest possible degree.? Health Minister Andreas Loverdos also defended the broader reform effort, refuting opposition claims that the debt plan would bring ?humiliating supervision? for Greece.
