Greek Prime Minister Antonis Samaras pledged to bring his country’s economic reform plan back on track, promising sweeping state-asset sales that will boost investment and jobs, and help break the country’s recessionary spiral.
“The first battle this government must give is the battle of the obvious, the self-evident,” Samaras told lawmakers in Athens today, at the start of three days of debate on a motion of confidence in his government. “This is a government that must tell the truth from the very first, such as the truth that, once again, the fiscal adjustment program has genuinely gone off track.”
Greece’s coalition government, formed after Samaras’s New Democracy narrowly beat anti-bailout party Syriza in a second election on June 17, is hoping to renegotiate some of the tougher austerity measures in the second, 130 billion-euro ($160 billion) rescue as the country suffers through a fifth year of recession. The concessions may be hard to wring from some European Union leaders, after the euro area and International Monetary Fund pledged a total of 240 billion euros in aid for Greece.
Two elections in the space of six weeks have dealt a blow to Greek progress on cutting deficits and implementing reforms ranging from a health-care overhaul to tax collection. The measures are part of a package of promises to the EU, European Central Bank and IMF in return for bailout funds. The political instability sparked concern that Greece would leave the euro area.
Samaras said in his speech that the coalition’s primary aim was to break the country’s recessionary cycle, not feed it with more austerity measures. Asset sales not already agreed with international creditors, including rail transport and energy, will “bring investments, jobs and growth,” he said.
“With the additional state asset sales measures we will tackle the additional cost of the program with our own resources,” he said. He said that the deficit falls by 1 billion euros for each percentage point gained in GDP growth.
Samaras’s government is backed by socialist Pasok and the Democratic Left party, which gives him 179 seats in the 300-seat chamber. The parliament will vote on the confidence motion at midnight on July 8. Finance Minister Yannis Stournaras and the leader of opposition Syriza will speak tomorrow.
The government’s emphasis on state asset sales sets up a clash with Syriza, the second-biggest party in the Parliament, which has said that negotiations with the so-called troika of official creditors are pointless.
Syriza will take legal action if the government moves ahead with asset sales, Syriza lawmaker Dimitris Stratoulis said on Athens-based Mega TV today. If Syriza becomes Greece’s next government it will “even send to jail those who sell off the country’s assets for peanuts”, he said.
Unemployment in Greece has soared to a record amid a slump deepened by austerity measures linked to the two bailouts Greece has received. Gross domestic product contracted 6.5 percent in the first quarter from a year earlier.
Samaras said his coalition will close or merge dozens of state agencies and the country must conquer red tape if it is to attract investment. The government will show determination to crack down on corruption and fraud that deprives the state of revenue.
“We don’t want to change the goals, we want to change those things that are obstacles to our goals,” he said. “The recession has to end, not constantly be reinforced.”
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