[MGSA-L] Samaras “Everybody Knows We Are Serious”

June Samaras june.samaras at gmail.com
Fri Sep 14 21:34:09 PDT 2012

“Everybody Knows We Are Serious”
An interview with Greek Prime Minister Antonis Samaras.
By Lally Weymouth|Posted Friday, Sept. 14, 2012, at 4:01 PM ET


ATHENS, Greece—Antonis Samaras became Greece's prime minister just
three months ago, but he has already become a veteran in a two-front
war. Samaras is trying to keep his country in the eurozone by agreeing
to major budget cuts demanded by the troika—the European Commission,
the International Monetary Fund, and the European Central Bank.
Internally, he faces the almost certain prospect of social unrest in
opposition to the austerity measures, while externally, he must
convince the rest of Europe that he's serious about change. Lally
Weymouth talked to Samaras in Athens on Wednesday. Excerpts:
L.W: How did your meeting with European Central Bank President Mario
Draghi go yesterday?
A.S.: We talked about the need for liquidity. It is a prerequisite for
us to start the much expected recovery. Without liquidity, you cannot
give money to small, medium, or large enterprises through the banks,
and you cannot allow the system to breathe. And we need a lot of
breaths at this point.

L.W.: Did Draghi tell you anything specific?
A.S.: We proposed different things to him: The ECB provides liquidity,
either through bonds or through the emergency liquidity assistance.
Other countries have access to the markets, whereas Greece does not.
Therefore, we have to get liquidity through the ECB.
L.W.: Did Draghi give you hope?
A.S.: Draghi, like everyone else, is talking about the need to first
see the troika report.
L.W.: Reportedly, the troika is demanding that your government is
going to have to come up with spending cuts of about 11 billion euros
and additional tax revenue. Do you believe you can do this and get
your coalition partners to agree? Can you get it passed by parliament?
A.S.: Our determination is given. It is 11.7 billion euros in
expenditure cuts. All 11.7 billion has to do with making the
government smaller and the whole system more efficient. Through
cutting more expenditures, the economy becomes weaker because [there
is] a GDP decrease. In the last five years, our GDP decreased by 20
percent. If we are to add this additional 11.7 billion, our GDP will
decrease by about 25 percent. This is too big to swallow.
L.W.: But you are going to go through with the reforms?
A.S.: We have to make sure that we abide by what we have signed
because we believe that what they call "Grexit" [a Greek exit from the
eurozone] is not an option for us—it would be a catastrophe. In 2013,
we are going to have a country in the sixth year of a recession with
unemployment above 22 percent and rising. We are here to fulfill our
obligations, to meet our targets. We only insist upon that missing
ingredient, which is to bring recovery soon. How? Liquidity.
L.W.: If you get the troika money all at once, wouldn't you use it to
recapitalize your banks?
A.S.: Yes, if we get the next tranche, which I hope will be in
October, it will recapitalize the banks and provide us with more than
$6 billion of arrears, which is money the government owes the private
sector. This will enhance liquidity. But the IMF has already estimated
that the next three years will find Greece still in a recession. We
have to avoid this by any means. We have to make sure that instruments
like the ones that can be put forward by the ECB will be activated for
L.W.: Like infrastructure funds?
A.S.: These are funds already earmarked for Greece that are still
[frozen]. These funds and two other factors will serve as a fiscal
stimulus. The first is we have to fight tax evasion. We have to reform
the tax-collecting mechanism and to ensure there are harsh punishments
for those who evade. The other element is privatization. … But we need
to conclude this deal fast. The troika is in continuous talks with the
minister of finance and other ministers. We have to get to that 11.7
billion and be sure that both agree on the numbers.
L.W.: Isn't the troika demanding that you pass the cuts through parliament?
A.S.: I have to pass it through parliament, and it will pass
parliament because we all realize the No. 1 prerequisite for our
future is to stay in the eurozone. But it is a four-year program, not
something we can do today.
L.W.: But you asked for a two-year extension, didn't you?
A.S.: We are asking for enough time. Instead of the 11.7 billion euro
package taking place over two years, it would be best if it were to
take place over four years. Two years—up until 2014—has been accepted
by the troika. We are talking about an extension to 2016.
L.W.: Why would they give you an additional extension when Greece has
never met a target?
A.S.: I believe it is reassuring for them to see the numbers.
Yesterday, we had the statistical evidence that in July and August,
expenditures fell by 17.5 percent compared to this time last year. …
We are taking steps that show that things have changed in Greece. We
have decreased the salaries of everybody who partakes in politics,
from the president to the prime minister to the MPs [members of
Parliament]. We have cut expenditures that have to do with parliament.
Everybody knows we are serious.
L.W.: People say that you are pro-reform now, but for two years, when
you were in the opposition, you were opposed to the very reforms you
advocate now. Did you make a mistake?
A.S.: I have always believed that this idea of having a nation go
through this very painful five or six years of continuous recession
with high unemployment would be detrimental for the economy and the
society. … Very serious mistakes were made by previous governments,
and Greece was ready to be abandoned by its partners and to leave the
eurozone, which would have created total catastrophe. When this was
imminent, we came in and helped change the government and asked for
quick elections so that we could finish the job.
L.W.: But outsiders criticize the lack of structural reforms in
Greece—a lack of willingness to fire public employees, the
unwillingness to open up these so-called closed trades where you
prohibit competition.
A.S.: Most have been opened up by laws. We voted for them. This will
not be a problem in the future. Most of it has been fully liberalized.
L.W.: Are you concerned about potential social disorder due to the
enormous difficulties the Greek people are having to endure?
A.S.: There are going to be a lot of problems with social cohesion. We
are already cutting down everything to the bone. Unless there is light
at the end of the tunnel, then yes, I am very concerned. So we have to
get light at the end of the tunnel. That's my primary policy. And hope
cannot be there unless we get the next tranche quickly so we can have
We are a pivotal part of the European Union. Any destabilization of
Greece would totally rock the boat. I wake up every morning and say,
"Has anything happened to Syria today?" If something happens in Syria,
thousands of people would be flowing into Greece. Illegal immigrants
are already a very big problem for us. We are already taking big steps
to disallow illegal immigrants from coming in. Imagine if that number
is multiplied by 10.
L.W.: Many U.S. businessmen believe that Greece will exit or be exited
from the eurozone. Are they wrong?
A.S.: They are absolutely wrong.
L.W.: Are you getting good signals from the Europeans? From German
Chancellor Angela Merkel, for example?
A.S.: If you look at the signals a month ago and then look at them
recently, they are very different.
L.W.: What changed?
A.S.: They saw what we are doing and that we are determined.
L.W.: Given the depth of your financial difficulties, it is hard to
understand why no government has touched the public sector.
A.S.: That is by the constitution.
L.W.: Doesn't it make it very difficult to run a government when you
inherit a large, untouchable public sector, much of which is
uninterested in pursuing reform?
A.S.: During the socialist period, the government became too big. That
created a crowding-out effect in the private economy, and it gave
everybody the need to pay more taxes in order to finance this big
government. We are against big government. We want a smaller and more
efficient government.
L.W.: But your GDP has shrunk 20 percent in the past five years. Isn't
it slated to go down another 7 percent this year? How do you break
this cycle?
A.S.: You start increasing the GDP through liquidity methods, through
structural funds, through privatization, and through investments.
L.W.: Foreign direct investment?
A.S.: It is very important. There are many people abroad who want to
help, who want to invest. In the past, they used to come here, and
they found a negative environment. Today, instead of red tape, we will
give them the red-carpet treatment. We want them to realize that this
is a land of opportunity. It always has been so, but we never allowed
foreign investment to come into this country. … We made it so
difficult for them. They got sick and tired of it.
L.W.: Was that partly to protect Greece's own businessmen?
A.S.: It was a culture that business is something bad—it was a
leftist-oriented psychology. We have to break this. We are
pro-business. We want entrepreneurs to come to Greece, see the
opportunities, and invest. We have to capitalize on tourism and the
maritime industry. The previous governments abolished the Ministry of
Tourism and the Ministry of Maritime Affairs. It is as if Saudi Arabia
abolished the Ministry of Oil.
L.W.: Do you think the Greek people will rally behind you?
A.S.: I think that people are ready to take that leap forward with us, yes.
L.W.: Are you ready to do it even if it is not politically
popular—even if you get defeated?
A.S.: Absolutely. It's not me. It's not my party. It's not my friends.
It's my country, and I don't play with my country. I won't do that.
L.W.: Are you saying you can't just have austerity alone?
A.S.: Exactly.
L.W.: Does the troika understand that?
A.S.: I think the troika and everybody else understands it after
seeing that Greece has been in recession for six consecutive years.
L.W.: Do you think they are willing to go easier on your country?
A.S.: Expectations were that we were doomed. It would be a matter for
the Europeans to solve as to whether to accept us or not, with very
high chances of us being kicked out of the eurozone. I cannot allow a
third party to decide on my country's future. I have to make sure that
we are changing things so this alternative for the Europeans is not
there. Some of them would love to have a Greek exit. I do not want
Greece to become the negative paradigm for the others—i.e., "make sure
you follow exactly what we tell you, otherwise you will be like
We have to make sure we do not leave the eurozone and that we are
safely within Europe. Many leaders abroad today realize this is the
best not only for Greece but also for Europe. The consequences are
unknown as to what would happen in Europe were Greece to leave. What
would be the reaction of the markets? They would hit the next nation.
L.W.: They would hit Spain?
A.S.: They'd hit some country for sure. Nobody knows the consequences.
But I cannot rest assured that since the others know this, maybe they
will not kick us out. I have to make sure this does not happen. You
don't play with death, and this would be deadly for Greece.

June Samaras
2020 Old Station Rd
Canada L5M 2V1
Tel : 905-542-1877
E-mail : june.samaras at gmail.com

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