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SPEECH BY THE PRESIDENT

OF THE NEW DEMOCRACY PARTY ANTONIS SAMARAS

Key Points

Thursday, May 12, 2011

Dear Friends, I find myself in the same place where, 32 years ago, as a young member of parliament I watched Konstantinos Karamanlis sign the “start-up” of our country‟s European Journey. I address you in all sincerity, in all honesty, honouring my debt as I perceive it.

The people of this country are demanding that we take at fresh look at

Greece, with a new Constitution and new institutions. - With a new political and public ethos. The demand is that we finally cast off the image of a wounded Greece, of a Greece of insecurity and panic. I am not addressing you therefore in the language of yesterday because I feel the anxiety of people and the demand from me that I be very clear-cut in my words. We have a government which incriminates itself! We know that recourse to the International Monetary Fund began some time ago when the international markets was still extending loans to Greece with ease.

The government of PASOK tried at the time to achieve what other countries were trying to avoid. Nothing was ever subject to negotiation. Some countries point out today that they achieved a „Memorandum‟ on better terms than we did. But I will not talk about the past today.

We do not need to because, what we had said in the past, has now

been corroborated by even the most authoritative voices from abroad that last year were criticizing us.

To cite one example: The Economist last year criticized us severely last

year when we voted against the extreme austerity of the Memorandum. Today it admits that what we had said was precisely what has brought us to the present impasse. See slide 1 „The Limits of Austerity‟.

-- «The objectives (of the deficit) were not reached chiefly due to ‘a

recession deeper than expected». -- And: «there is the fear that more cuts (today) will take Greece into

deeper recession». This was what the conservative and liberal Economist said.

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I however am interested in the language of Greece. The way out that we propose today concerns each and every Greek citizen wanting to grasp at something and to hope.

I will demonstrate two things as simply as possible:

-that we can overcome the crisis -that we can improve without returning to a dependent prosperity

and the false illusions we had in the past.

We need to stand on our own two feet again proudly. For us to become competitive and outward-looking as befits the Greeks. We must never again permit any foreigner to consider us as „an example to be avoided‟.

First of all I call upon you all to exorcize the ghosts of past decades –

the ghosts of popularism, of statism, of self-pity, defeatism, political corruption, bigotry and a facile „settling‟ of our national problems. In any event, PASOK has now brought us to the point where there are no solutions any more.

That is why we propose not simply another route for the Economy or a different logic for the country which, if adopted, will liberate the strength of the Greek people seeking a Self-confidence and Dignity Pact from us. Dear Friends,

Let me just cite one thing – in the first four months of this year, as concerns the main objective of public revenues, the government was expecting an 8.5% increase and ultimately there is a 9.2% decrease! The deficit on the other hand has increased by 14% since last year, despite the unprecedented sacrifices of the Greek people.

What I am saying therefore is that emergency situations require

emergency decisions! I am referring to the decisions which activate the Restart of the

Economy, of the market, of expectations, of the morale of Society. The Restart of Greece! The priority for saving the country!

What does this „Restart‟ mean? It means that economic revival cannot

take place alone, automatically. What you need is shock treatment. This is what restarting would be - a positive shock – a budgeted, modern and realistic proposal.

What Greece has suffered due to disastrous policies is a paralytic shock.

Of course developments are taking their course. Luxembourg has voiced our innermost fears. We have gone from being equal partners to almost mere „borrowers‟. Whereas we were to have gone to the markets at the end of 2011, the government is now seeking new loans, precisely because the markets it seems will be shutting us out for some time yet.

Let’s see what the Restart Plan for the Greek Economy with a positive

shock is.

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First of all – reduction of tax rates! Boldly and decisively! It has to be done immediately so that it is effects the economy from the

first day. It has to be in the medium-term also so that the general mood and the expectations of the market are improved. [slide 2]

-- we propose a 15% tax on profits for all companies – a flat rate – and

15% dividends tax down from the present 25%. -- the highest income tax bracket will be reduced from 45% στο 40%

initially with fewer tax brackets and in three years will not exceed 30%. -- as for VAT this will be set at 19% from the present 23% for the top

category, 9% from the present 13% for the middle category and will drop to 4.5% in sectors such as Tourism. The positive impact on inflation will also be seen very shortly.

-- as to fuel tax, the increases imposed by PASOK will be removed

within two years. We have the most expensive fuel in the whole of Europe. -- a reduction in employers‟ contributions by 25%. Ireland has already convinced its Troika and reduced employers‟ contributions. This will substantially reduce non-payroll costs to employers. Illegal labour will be severely punished. The ensuing increase of contributions will balance out any losses for Social Security Funds -- a gradual abolition of „taxes on behalf of third parties‟ over three to four years. This all brings us to another enormous commitment - promoting Entrepreneurship which has been persecuted for decades where statism has been rife in Greece. This persecution has hit large enterprises, but chiefly the middle class which is mostly made up of small and medium-sized companies and self-employed persons. Many will ask what will all this cost? I will come to this presently… for the moment bear in mind that all our neighbouring countries have low tax rates, some even lower. For us to survive we must make a decisive step and now is the time to do so! The second start to the restart is to settle all outstanding issues and draw a very strict „red line‟ from now on. There are three points to note here: -- the abolition of a „means test‟ for acquiring a house for the next three years – be it the first or second home or country residence. This means test at the moment for the acquisition of a house does not punish those who have made money illegally. All it does it to punish the economy because it has

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brought the construction sector to a standstill. The construction sector was the „locomotive force‟ of the economy in Greece.

-- no further increase on pre-set rates on property because this does not generate revenue but simply brings the construction sector to a halt.

-- no means test on capital repatriation so as to inject money into the Greek financial system. All liquid and fixed assets abroad held by Greek citizens are to be declared. All tax penalties will be suspended for one year. With the exception of those who are involved in „money laundering‟, in this period all assets held in Greece or repatriated capital will be declared, after which the most stringent rules will be applied throughout. The only exception here will be for politicians! I propose that a means test should be applied immediately to all politicians who have held the post of Minister or Deputy Minister since 1974! And finally an assets register will be established for all Greek citizens. * the third step to the restart is a broader reform to the tax system. Foreign and domestic investors must be convinced that all these bold steps will last and not be rescinded later on.

We must therefore ensure a stable system which combats tax evasion. Despite frequent announcements to date, the results have been pitiful or even the exact opposite of what was expected.

Slide 3 shows that in 2010 tax evasion increased despite the expectations of the Memorandum!

What we need therefore is a complete overhaul based on four principles shown in slide 4.

-- on the issue of tax rates being reduced we say that if you increase taxes when there is a downturn in the economy this acts as an incentive for tax evasion.

-- Secondly, a simpler tax system is needed. In the last year alone ten tax laws covering 1718 pages have been introduced. Probably a world record….

We intend to codify all tax provisions within a few pages and to have one single tax law applying to private individuals, businesses, real estate and VAT transactions respectively. This would mean a single 50-page piece of legislation for companies, rather than thousands of articles of law dating back to pre-war years…

This in itself will be not just a reform but a revolution in a tax system which we have not had for decades!!

-- thirdly, strict penalties must be applied to anybody evading

taxes or contributions because any further stealing from the state after taxes have been reduced deserves the strictest of punishments! We do not agree with the present government that assumes that citizens are evading tax and dishonest until proven otherwise. -- fourthly, face-to-face contact between taxpayers and tax officers

must be reduced to the minimum. Here we have three new elements:

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- small and medium-sized undertakings can freely choose between the present system or an imputed tax system. The imputed tax calculation will be based on objective trends in the specific sector and region.

For example, for a shop surface of 100 metres, an imputed cost will be set according to the area. For the prosperous area of Kolonaki there will be a different imputed profit compared to the worker area of Kokkinia…

In the event that the taxpayer does not accept the calculation then a full audit will be carried out.

- „external help‟ in submitting tax returns through auditing companies or

accountants‟ offices will be possible, whereby these third parties will be responsible for the accuracy of the information submitted. The tax authorities can audit these offices and the taxpayer to exclude the possibility of collusion.

The controllers will also be subjected to controls. -- Finally the Books and Tax Code will be abolished which is long

overdue. We are proposing a revolutionary reform of the system to make it

simpler, less bureaucratic and user-friendly to the honest taxpayer and punitive for tax evaders.

Slide 5 shows the expected increase in revenues due to a reduction in tax evasion over the next four years, based on modest calculations. * The fourth step of the restart is the legalization of all buildings constructed without a permit. This has been the greatest outstanding issues for decades. Aerial mapping of the whole country will enable penalization for any illegal construction in the future. At the moment there are more than one million illegally constructed buildings throughout the whole country.

This of course will not apply to buildings in archaeological sites, on the shoreline or those which constitute an environmental hazard. It is estimated that 70% can obtain regular property titles immediately, with the respective fee payable to the state over a period of three years. Legalization and the fee payable in order to acquire the title deeds shall be based on the region, the surface area and the gravity of the offence.

Slide 6 shows anticipated state revenues over a 3 year period from the

full legalization of illegal buildings. In the first year alone expected revenue will be 1.5 million. Contrary to

this government‟s approach of temporary legalization, we are advocating a comprehensive land and legalization policy.

The state itself recognizes that it cannot proceed to demolishing

buildings, which in turn encourages illicit construction everywhere. A red line must be draw now. Most of the existing buildings will acquire

a legitimate title but draconian prohibitive measures will be implemented from now on.

Any future illicit construction will be demolished immediately at the owner‟s cost and with a heavy fine to pay...

This will separate the chaff from the wheat and convince society that a stop will be put to illicit building.

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The fifth step of the Restart: the State is to pay off its debts to private individuals, which is the „domestic debt‟, the payments due by the state to citizens. This includes returns on VAT, subsidies, lump-sums on pensions, payments on contracts with private or legal entities for services rendered as well as construction. These obligations can be met by immediate payments, by state bonds, or offset against any outstanding dues of taxpayers to the state. This should mean a market liquidity of about 5 million euros.

The State cannot be seen to spearhead the movement of „I‟m not paying‟! Nor can the state apply severity when it does not itself meet up to its commitments.

* The sixth step to the restart. From now on banks are to commit to offering the real economy some part, say 20-30%, of the guarantees they receive. Over the past three years they have received 63 billion. A new provision was ratified recently for a further 30 billion. Each bank uses this money to cover the outflow of deposits, the increase in non-performing loans and the exclusion of Greek banks from the interbank market. This in itself has created a liquidity squeeze on the market.

No bank can reverse the trend alone, but if liquidity is created on the market by all the banks, then the market will be given a breathing space and their assets and capital adequacy will improve and capital flight will stop.

From the new guarantee installment a separate account is to be

created to be earmarked exclusively for the real market. This would be chiefly for enterprises in the export, tourism and mortgage sectors. One quarter of this will come back immediately to the state coffers in the form of tax revenues.

The emergency measures to boost bank liquidity must be extended, as I discussed with Mr. Trichet, beyond 2011 and for the whole of 2012. This is one of the first measures I will negotiate with our lenders to create greater liquidity.

The market is full now of post-dated cheques being extended continuously. Tens of thousands of undertakings are in danger of folding, not because they are not operating but because they are unable to recoup receivables! Other thousands of shops are without a single customer all day.

The seventh step: all the above measures change the general morale of the market and the measures to boost the economy increase benefits with a zero or minimal fiscal cost due to this breathing space I have been proposing over the past eighteen months. Slide 7 shows five of these vital measures:-

-- First time home-owners to receive a 2% subsidy on loans to bring in up to 2.5 billion euros in the first two years. The construction sector is still the locomotive force of the economy!

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-- The programme to improve home energy conservation, if applied properly and not with half-hearted measures as today will also bring substantial revenue to state finances in the first two years. -- If European Union Funds are utilized properly we can go back to fifth position in terms of absorption as in 2009 or even higher, and not 17th or even lower as today. -- The government has put a stranglehold on public investment. Each time Mr. Papaconstantinou needs funds, - which is an ongoing situation- he makes cuts to the Public Investments Programme. It is worth however noting that this programme has the highest multiplicatory effect, reaching a factor of 5. This is a very powerful tool that the government has to combat recession! -- Major investment programmes are needed for permanent holiday homes. Wherever such areas can be found, titles should be cleared and then put up for auction for holiday or permanent residences. This is a very realistic programme which has been successfully implemented in other Mediterranean countries and does not impinge on the hotel sector.

What is even more important is that such programmes can bring in permanent revenues for the state even before completion through preliminary financing and other means.

All these „relief‟ measures can bring in more than 8 million in state revenue immediately within the first two years.

There are a number of important examples of measures that can bring in additional state revenue without needing expenditure: for example, by appropriate utilization of the Egnatia Highway, the promotion of the “Development Routes”, the five major motorways which are the very backbone of our country, but with progress now almost at a complete standstill.

Another example is the type of concession given for the Piraeus Port Authority being extended to regional harbours and airports throughout the country, or waste management and the extension of the Suburban Rail network.

This will bring direct revenues and development. This government has brought everything to a halt however.

Slide 8 sets out all the possibilities of this package. Apart from a Restart to the economy there is another priority – society must survive! For it to survive, we must remedy the injustices done:

One injustice must be rectified immediately – those receiving low

pensions of up to 700 Euros. They have had their meager pensions cut by 25%. We will reinstate these as a matter of utmost priority as soon as we come to power because it is not only the right thing to do but also because they are the ones who spend their money on the market.

We will reinstate child allowance to large families, which were curtailed by this government, to the same levels as before and incorporate this into our first budget.

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The total cost for both of these measures does not exceed 2 billion Euros annually.

I will now explain the total cost of the Restart to the economy and where the money will come from.

It must be noted at the outset however that these measures will not

only incur costs in the budget but also bring in revenue for the state. There is a cost involved but there will also be revenue generated from

turnover on the market due to increased development. This will be considerable with the first „safety net‟ being the money brought in which will exceed the cost.

Slide 9 sets out the cost-benefit analysis from all the Restart measures

and the re-establishment of social cohesion based on the most modest of calculations.

You can see clearly that even in the most modest case, from the very first year the revenues for the state are in excess of costs.

Consequently, there will be benefits to be derived right from the star -

with a reduced deficit of about 2% of GDP in the first year, even with the most conservative of estimates.

This net benefit is our first „safety net‟. This is not the only one however, because we will move on to

additional cuts to squandering of public finances. These are real cases of squandered money as follows:

-- Hospital costs to be based on results of successful state hospitals

abroad so as to set a guide to detect waste of financial resources. -- A modern, computerized system of management to automatically

detect any attempt at embezzlement in the Public Health Sector. -- A computerized system of medical prescriptions. The delay in

introducing this system is costing half a billion Euros each year! --A ceiling on the amounts of prescriptions serviced by the

pharmacies, according to the area. We cannot tolerate enormous divergences of thousands of Euros from the annual average…

--A premium for savings in Public Procurements for companies offering substantial decreases compared to prices to date.

--A freeze on recruitment for three years. The only exception is for emergency requirements. Thereafter the rule will be that for every five employees pensioned off, one new civil servant will be recruited, but no redundancies! What should be applied is the institution of a „labour reserve‟ for organizations abolished or merged.

-- Cuts to be made to incomes paid at the higher level especially in the public utilities companies. See slide 8 for more information.

The government is supposedly trying to make real economies in widespread waste, but is this really true? Certainly not! Slide 9 shows that PASOK has inaugurated a new round of waste where once again the party has taken over the government…

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Slide 10 shows overall economies that can be made. The measures

coincide with a number of those proposed by the government in its Medium-Term Programme. In the measures we are proposing however there are no „horizontal‟ cuts, but rather operational economies and severe cuts to privileges at the higher income level.

This is the second „safety net‟ in our policy – additional economies to

be made. Within one year we can make savings of 4.2 additional billion by targeted cuts to expenditure and income increases. Within 2 years, 9-10 billion in savings and within 4 years, 18 billions overall, without recession.

This will be once the Restart programme has begun... Slide 11 shows the Restart Programme overall compared to the

Government‟s Programme. The pickup to the economy ensuing initially and the development later

on, along with the two „safety nets‟ will substantially reduce the deficits as follows:

-2% in the first year from the first „safety net‟ and 1,9% in the second year. This gives a total deficit reduction of 3,9% of GDP.

During the next few years the economy will move into a pickup phase and will begin to produce increased income for state coffers. The deficit will thus be reduced by more than 7% of GDP within two years.

Once the economy moves from revival to development the deficit will

be reduced even further- much more than foreseen in the medium-term programme of the government, - as much as 11% in three years.

Within three years of implementation our programme reduces the

deficit to 1% and thereafter generates a surplus. This will enable us to have a balanced budget within just over three

years because, as of last year, things have changed, where the recession deepened substantially and the paralysis on the market has worsened.

No „miracles‟ will be wrought but just consider that the austerity

imposed by the Memorandum so far is in excess of the total deficit of 2009. With the Revival of the economy we will instigate, these cuts will „take effect‟. So far recession has „swallowed up‟ these cuts, as the government itself admits.

Rebooting the economy is an immediate objective, but to achieve it additional measures are needed, of an institutional nature not financial.

Slide 12 shows some of our top priorities apart from the offsetting of

amounts owed to the state against what the state owes.

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-- By way of indication I am referring to the obligation of the state to provide all documents required electronically and not for people to have to go from department to department.

-- The fast track must be extended to all enterprises not only to the

largest and not only foreign enterprises. -- All judicial conflicts to be settled with one year at the most. This will

be like a legal „fast track‟ which requires an institutional reform in the way justice is meted out.

--A „Zero base Budget‟ will mean a re-examination of every budget line.

Slide 10 sets this out more analytically. I will cite just two of the most important aspects: -- The encouragement of entrepreneurship. This means, among other things, the abolition of any extra emergency payments on profits. These only discourage entrepreneurship with minimal revenue. These one-off payments charged to businesses have become a permanent fixture and is the greatest example of persecution suffered by this sector today. This must be stopped.

- A resolute political decision must be made to stop illegal economic activity because it is a death blow to true trade. By putting a stop to illegal trade the climate on the market will be improved immediately and will bring immediate revenues to both business and the state.

One thing should be clarified: All seven steps to the Restart presented must be taken simultaneously,

not individually or piece-meal.

Otherwise we will not be able to have that positive shock we need.

So let‟s Restart! Let‟s move ahead with all necessary measures for the Revival to really

take place and not to fizzle out overnight. It must lead smoothly to viable Development thereafter.

There is also a third priority: a change to the model of development. We must move ahead with our country‟s renewed competitiveness, looking to the outside world. We must boost Exports therefore.

Restart –Revival and then Development and a change in the model of

development. At one and the same time we must speed up fiscal consolidation.

Slide 13 shows some important steps to change our model of development.

--For example a drastic change in the tax system we have already mentioned.

--For Shipping and Tourism we will re-establish the respective ministries with a full reinstatement of their competences, to come directly under the Prime Minister.

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--The sectors of agriculture, animal husbandry and fisheries. You may

be aware that Greece imports 65% of its requirements for porkmeat and 90% of its beef consumed. This is inconceivable in terms of financial logic and must change.

--Processing and standardization of quality products is an area of enormous potential for us, but we are still performing ineffectively.

--The re-declaration of the Exclusive Economic Zones which PASOK regrettably fears. The exploitation of our mineral resources must finally be addressed after years of inactivity….

--Research-Technology-Innovation. These are areas that are not the exclusive preserve of others. We too can excel in them!

More details on this can be seen in Slide 11. What is also intangible, but important for cultural Greece and which can

contribute to a change in the psychological climate: In the new national objective to save our country we will activate private

initiative as well as the omnipotent Greeks abroad. Here I refer to foundations, sponsorships and volunteerism. All these can have a huge added value and are part of our tradition of great national benefactors.

We need to organize ourselves as for an Olympiad. We need to call

upon the powerful – in an organized fashion- to contribute to special projects, for example to our main museums, which without help lose their value and do not contribute to our cultural and tourist development. The role of the President of the Hellenic Republic could be instrumental here.

All the sector development strategies will be addressed on a future

occasion. We will then proceed to our specific policies and present our analytical programme with the competent sector chiefs for Shipping, Tourism, Energy, Processing, Agriculture, Trade, Environment, ICT, Research as well as the specific 1Χ13 programme which gives the specific development priorities for each of the 13 Regions in the country.

For the moment however, I insist on our priority of restarting the economy. Without this there is no point in any further discussions.

There is however something we must clarify over and beyond the

Restart. This is linked to the immediate change in the climate in Greece and the change in our image abroad. We must utilize the public assets to immediately reduce our 50 billion in debt.

This is the reason we raised the issue last year. We knew that with the impasse of the Memorandum, Greece‟s debt would spiral out of control. This would in turn raise the issue of insolvency, or „restructuring with a haircut‟, which is equivalent to a controlled bankruptcy.

When we proposed this last year to the government we were derided. Today the Troika has set this as a condition for borrowing…

That is why we proposed it last year – to avoid the present situation. It takes time however, because the state needs to legislate, it needs to clear the titles to the assets and thereby create value.

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Land use must be determined as well as a utilization co-efficient to generate added value. Thereafter it must examine how the assets will be utilized. This will convince any potential buyer that no problems will arise later on. There must be a stop to ridiculous fiascos such as with the Astakos project which harm our image and the climate on international markets.

Once this is done the various utilization modes for the state assets are manifold – from the simple, traditional modes, such as leasing and public and private partnerships, and more complex modes such as Mutual Real Estate Capital, Holding Companies, SPV‟s, which are special investment vehicles to exploit natural resources as well.

The state can thereby be paid in advance for part of the value against

future exploitation and to have bridge financing for the intervening period between liquidity and investment revenue expected in the future.

This will mean cash in hand without necessarily ceding ownership of assets.

We must be wary of fixed notions – some properties can be sold, but added value should not be given away and any sale of important state assets must be ratified by Parliament.

We can also have utilization of Church assets. This must be done in full transparency and respect of the role of the Church and its Charitable Mission. A Church that has its own assets is strong, and the Church in Greece does have assets, but no financial resources.

Do not expect me to indicate which „prime‟ properties or land should be utilized in what way. There is no reason for me to do this and I am not an estate agent...

Making good use of state assets means convincing people to invest, but nobody will invest in an economy that is in a state of paralysis, in a society at unrest, in a country attacked every day by speculators preempting our bankruptcy. This brings us back to the issue of needing to Restart…

If we succeed in restarting the economy the 50 billion can be found relatively quickly.

Without a restart, exploitation of state assets is in vain. This would be

a case of „flogging off‟ our assets at cut price. The same holds true for denationalization which we are in favour of.

We have repeatedly chastised the government for dragging its feet – not one state enterprise has been privatized despite announcements to the contrary.

At the moment the entire public sector enterprises on the stock exchange are worth less than 6 million as against 8 million they were quoted at in September 2009, which was also a year of international crisis.

With a stock exchange in turmoil, if you announce mass sales of share

packages then prices will plummet thus damaging your own assets.

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Here we need to see what we are selling off in each case, at what price, with what prospects, and when. What is our strategy?

For example, the government‟s plan to sell of 17% of the public power corporation is a huge mistake. This reveals cash flow panic. It has no bearing on energy infra-structure privatization and how it operates world-wide.

We will proceed to privatizing the PPC in the most modern, financially

sound, transparent and developmental way. The modern concept of privatization everywhere begins with the

liberation of the market:

--Liberalising the energy market means first and foremost breaking the state monopoly down into various companies and then choosing what to sell off.

The PPC is not one single thing. It must be examined as a total group of different company sectors.

The distribution and transport networks for example must remain under state control. The remainder can be privatized.

--Liberalizing the energy market also means that we must chose our energy mix which the country will produce in the future as well as the regulatory framework.

The idea is not only to receive money now, but also to produce cheap

energy in the future to save good jobs. We will seek a strategic investor for those parts offered up to

privatization, - this is the only way to achieve any development… We will establish a regulatory framework to ensure public control over

social resources, such as our water reserves which are so important for our farmers.

We must also determine at the outset what the benefits for private individuals will be, the existing loans, the obligations for environment rehabilitation in local communities that the PPC and the state have undertaken. We must see what the new investor can undertake and what must be completed prior to privatization.

The government‟s plan, I repeat, does none of this. What is valid for the PPC, which is a listed company, will prevail in a

different manner for the non-listed Railways Organisation. Rail transport in this country is 3% of total transport, whereas in Europe it is 70%. What is our plan?

What opportunities for investment are we opening up? When clearly determined it can lead to a substantial leap in

development through rail privatization. Otherwise we are simply selling a plot of land in the desert.

For other state enterprises, such as the water companies in Athens and

Thessaloniki, with the water networks remaining under public control of course, for the Hellenic Postal Service, the State Petroleum Enterprise, the general mining and metallurgical company (LARKO), the casino, the lottery,

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the Hellenic horseracing organization (ODIE), the salt mines and tourist properties we will promote their immediate privatization with a strategic Investor.

As for the football lottery (OPAP), we must remember that it brings in

enormous revenue to the state, both directly and indirectly. We cannot cede state participation at a cost which is equal to two or

three years of revenue. That would not mean selling it off, but giving it away!! Finally before anything is privatized we must get serious. We must

change the whole system of unfair privileges in the public enterprises. Here we have a closed shop situation, where people behave as if they own these public assets, shaking a threatening finger on television and hiding behind the government – behind the government that nurtured them and that is allergic to decisions that it does not understand as a political party, nor can it manage as a government.

It should be clarified that no trade union in state enterprises owns either

the energy sources or other public infrastructure. Trade union rights are sacrosanct, but there are no private privileges, nor can they have any and we will not recognize any.

The post-dictatorship regime has nurtured many „black spots‟ of

arbitrary action and public assets‟ abuse. If the modern state wants to make optimum use of the wealth of the nation so as to move out of the crisis these „black spots‟ must be expunged. Otherwise there is no use discussing.

. To answer the last question: yes, in order for all this to succeed we

must change the conditions of the Memorandum! Perhaps some people are banking on our bankruptcy. But Greece is at a crossroads where unprecedented strife is in effect around us, threatening to destabilize not only this country but also other European countries around us.

We have therefore a strong geo-political argument too – Greece cannot endure any further instability, when the whole region around us is in a state of destabilization.

We also have the precedent of the Irish. They were able to achieve initial negotiations – without a „gun on the table‟, and other political myths – much better conditions than in our Memorandum, maintaining their tax rates at 12, 5% leading the country to economic revival today!

When we see the final version of the Portuguese Memorandum we will all see that the Greek government did not negotiate a single thing. Already the Portuguese are celebrating openly that they have achieved much better conditions than Greece. To cite some of them- they did not abolish the 13th and 14th monthly wage. Pensions have been frozen apart from the lowest. Only pensions in excess of 1500 euros have been reduced. Also two thirds of the total amount borrowed will be paid out to Portugal outright.

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Can this in any way be compared to our Memorandum? Look at the new centre right government of Edna Kenny in Ireland – it

has been able to improve the conditions of its Memorandum. It has been accepted that if they stick to the same objectives of reducing their deficit and debt then their Troika has no objections to the way in which that will be achieved.

This is what we aspire to as well – a change in the conditions set in the Memorandum, so as to acquire flexibility and for there to be a restart to the Greek economy to move out of the Memorandum as early as possible. This is why we have created two „safety nets‟ for our proposed programme. We want to maintain fiscal consolidation planning but we want to change the present tack of the Memorandum which is leading us nowhere.

Europe has other problems as well. It has created a Permanent

Support Mechanism which as top European stakeholders agree, perhaps allows speculators to weaken countries with problems more easily and also impedes their return to the markets. I have mentioned this to my colleagues in Europe on a number of occasions.

International demand for European products is expected to drop. Countries such as China, due to internal inflation, are taking a step backwards.

Under such circumstances all forecasts show an economic recession and an increase in interest rates in Europe. European leaders must understand that this will make it even more difficult for Greece in such a climate to move to development so as to overcome its crisis. How is Greece going to succeed if the recipe that the whole of Europe considers a failure, continues?

Let us not forget the daily bombardment by the international press as to the possible contamination from the Greek crisis to the rest of Europe. This is a development they would wish to avoid but this fear has been changed into yet one more argument as to our problem.

There is therefore an iron-clad argument to achieve a change in policy. I will negotiate all the terms of the Restart mentioned above. I will negotiate another programme with other intermediary steps, with

more ambitious goals, but with more realistic means. I will negotiate new public debt repayment terms within Greece so as to

have an immediate reboot to the economy. I will also negotiate the extension of liquidity guarantees towards Greek

banks until 2012, so that part of the liquidity can be disseminated to the real economy. I will insist on this issue because with the present tight liquidity nothing will be left standing.

I will negotiate every sentence and every idea which will provide relief in managing our debt.

There are also things that Europe can do to overcome its crisis:

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- Such as the Eurobond for example already being discussed, although for the time being there are forces blocking it.

- Such as the possibility of buying up our debt on the derivatives market as well. This can reduce the overall size of the debt but also the cost of servicing it every year.

The idea of a European Revival Fund for example, if established along with the proposal by Commissioner Baroso for major trans-European project bonds which will boost economies in the European Union overall and not only in the most „problematic‟. This will also forge European solidarity.

Perhaps the main loser in this crisis is ultimately European Solidarity. When under these conditions the member-states lend money and make a profit from those in need this is a far cry from solidarity. This is harmful in the long run and does not help European Integration.

- One final issue. Many have planned or proposed a „velvet

restructuring‟ of our debt. But for this to be beneficial we must have had a Restart.

Without this all other measures are simply a temporary respite. Do not however think that a restart is always painless. There are many

people in Greece today being paid by the state with bonds, and now facing the possibility of ruin should there be an extension of payments. We need to keep our eyes open…

This means we must know what we are asking for, that we know where we are going.

The Papandreou government is not able to do this, especially given the disagreements and dissident voices, divisions and daily rumours of a government reshuffle and bickering between ministers.

This government has not understood that the extension and new

Memoranda are being discussed today precisely because all the forecasts for „saving‟ the economy made last year have failed.

Restarting the economy is therefore imperative, come what may. Whether measures to facilitate us are taken or not the economy must

take off, society must stand on its own feet, and no „relief‟ in itself can ensure that. We need to restart the economy to achieve economic revival and development.