NEWS

Premier defiant on economy

Prime Minister George Papandreou indicated yesterday that his government would attempt to revive Greece’s economy by stamping out corruption rather than cutting back on public sector salaries and levying more taxes on the middle class. The premier spoke in Brussels after talks with fellow European Union leaders, who wanted to know what measures Greece will take to reduce its 300-billion-euro debt, which stands at 113 percent of GDP, as well as its public deficit, forecast at 12.7 percent of GDP. Papandreou insisted that Greece would not default on its debts and does not intend to ask for financial aid from the International Monetary Fund (IMF). «We are not on the precipice,» said Papandreou. «If we were, we would be cutting wages. We will make changes but they will only hurt those that have to be hurt. Salaried workers will not pay for this situation, we will not proceed with wage freezes or cuts,» he said. «We did not come to power to tear down the social state; we are here to put right inequalities.» The prime minister is due to unveil on Monday the measures that his government plans to take to get the economy back on track. He told European leaders that the reasons behind Greece’s economic problems are not the same as those that have caused crises in other countries. «They are our distinct problems. We know them and we will tackle them,» said Papandreou, adding that his government aims to make institutional reforms that will combat systemic corruption and patron-client relationships while also slashing waste and fighting tax evasion. This may fall short of what Greece’s partners in the eurozone are expecting, given that Ireland has announced cuts of 4 billion euros in public spending and a reduction of public sector wages of between 5 and 15 percent.