Greek PM vows radical changes to restructure country

April 15, 2011

, ATHENS, Apr 15 – Greek Prime Minister George Papandreou on Friday pledged to "restructure" the country with a "radical" roadmap out of the debt crisis and dispel overwhelming market expectations of a credit shakeup.

"We are all determined to change our homeland for the better once and for all," the prime minister told an extraordinary cabinet meeting aired live on national television.

"This is the battle we have been waging for the past 18 months, this is the battle we will continue to wage until the end of our term," he said.

Papandreou presented a broad outline of "radical changes" through a three-year programme to reduce state spending to around 44 percent of gross domestic product (GDP) by 2015 against the 2009 rate of 53 percent.

The roadmap will be presented in detail along with a timeline "after Easter" which falls April 24, said the prime minister whose socialist Pasok party has a six-seat majority in parliament and another two and a half years in power.

The government has so far managed to bring down the operational cost of the state\’s huge bureaucracy by two billion euros from 2009, Papandreou said.

At the time, he said, "more than one in two euros circulating in the economy came from state coffers, naturally from loans that exploded the debt and the deficit."

Soon after the socialists came to power in October 2009 by defeating a two-term conservative administration, they told the European Union that Greece\’s deficit data had been misreported in official reports.

The revelation wiped away Greek credibility and sparked a run of credit downgrades that made it impossible for the government to borrow money on the open market.

Greece faced insolvency before it was rescued in May 2010 by the European Union and the International Monetary Fund with a 110 billion euro ($160 billion) loan.

EU auditors working with Greek officials last year put the 2009 deficit at 15.4 percent of output, over five times the allowed EU level.

The country\’s debt currently stands at around 340 billion euros.

Eurozone powerhouse Germany said Thursday that Greece may have to restructure its debt but said such measures, if taken before 2013, would have to be voluntary on the part of its creditors.

Papandreou on Friday said the deal with the EU and the IMF, which enables Greece to avoid still-murderous rates on the market until 2012, allows the government to tackle problems "not by restructuring its debt, but by restructuring the country."

The prime minister specified that his "roadmap" was founded on a medium-term budgetary programme, "the first ever adopted by the country," which targets 23 billion euros of savings by 2015.

Papandreou judged that he had "the support of the people" in his endeavours as "it is the only way" open to the country.

Any route which involved restructuring Greece\’s debt would see Greece isolated, weak and impoverished, he warned.

He also urged employees to display "mobility" between the private and public sectors to help build a system that "guarantees a minimum standard of living".

The austerity programme, which has plunged Greece into a deeper-than-expected recession, last year caused waves of strikes and protests, many of them violent.

Unions and worker syndicates in many state enterprises targeted for more cuts have pledged to fight against the measures.

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