Greek Governments Policy Statement - The Best from Greece

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Posted on: 18/Oct/2009

Greece's new Prime Minister George Papandreou on Friday presented his government's policy statement to the Parliament elected on October 4, calling on Greek society to rally together in order to overcome the crisis now affecting it on every level.

He invited all Greeks to join the government in what he called the "visionary, realistic but also self-evident road of change, already signalled by the actions of the new government on assuming office."

The prime minister said that his government had taken over an economy that was "in a state of emergency" similar to that handed over by the Mitsotakis government of 1993, with "large hidden debts and spending," an "unprecedented lack of competitiveness" and social insurance funds in a state of penury.

"Public finances are not, however, the cause of today's situation but one of the severe symptoms of a crisis in governance - a deficit that brought a degradation of everything," he stressed.

For each area of government, Papandreou emphasised initiatives seeking to address the crisis in relations between the state and citizens, which he said should create "consensus on a national agreement within society for major changes".

Right at the beginning of his address to Parliament, the prime minister made it clear that he would support Karolos Papoulias for re-election as President of the Republic, anticipating a positive vote from main opposition New Democracy based on the pre-election pledges of its leader Costas Karamanlis.

He also promised to adopt any opposition party proposal that enhanced transparency, regardless of who made it.

Regarding public administration, Papandreou pledged that all public-sector hiring would be done via the Supreme Council for Civil Personnel Selection (ASEP) alone, with annual examinations to fill permanent civil service jobs. He also promised changes in the composition of public-sector disciplinary boards so that those monitoring and those being monitored did not come from the same service.

The prime minister then went on to outline details of an economic stimulus package planned by the government, through boosting incomes, new legislation and increased public investment spending, alongside a drive to restore order to public finances.

On boosting incomes, Papandreou promised a 'solidarity benefit' for low incomes, a back-dated 30-euro increase in the OGA farmers' fund pensions starting from October 1, 2009, salary increases above inflation for wages and pensions and a freeze on rate hikes by public utilities.


The premier promised a draft bill to protect borrowers from abusive bank practices within the first 100 days of government, as well as bills to change the operation of the Tiresias inter-banking and credit monitoring system and to simplify procedures for business start-ups.

He said the government intends to increase funding for the public investment programme by 4 percent of GDP, rising to 5 percent of GDP by the end of the government's four-year term.

Papandreou stressed, however, that none of the above would have the desired impact unless the government also managed to radically overhaul public finances, which he said were "facing an unprecedented derailment".

Outlining his plan of action, the premier said that the government's first task would be objectively record the current state of public finances with the assistance of the National Statistics Service, which would be made fully independent.

The next step would be to crack down on tax evasion, stricter control of public finances and a new tax bill to be tabled within the next three months. Papandreou promised that the new tax system introduced would be fairer, progressive and pegged to the consumer price index, taxing income from wages and dividends in the same way while imposing low taxation on undistributed company profits, abolition of favourable measures benefiting major shareholders and a progressively rising taxation of property and inheritance beginning with high tax-free allowances, as well as taxation of Church property and economic activities and the taxation of property owned by offshore companies.

In terms of producing wealth, Papandreou said that this would occur in a context of "green development" and the decisions taken to stem the rate of climate change on a global level, and by developing tourism.

Specifically, the prime minister announced a major shift toward the use of renewable energy sources and exploitation of Aegean islets for energy purposes, making a commitment to table a new national plan for energy in Parliament by the end of December.

Greece would set its sights high, aiming to produce 20 percent of its energy needs from renewable energy sources by the year 2020, the premier added.

He also emphasised that the government would show absolutely no tolerance to those illegally occupying land within burnt forests and cited green development as the main guideline for the development of the Greek countryside, with changes in crops and a shift to high-quality, organic farming.

Papandreou promised to use the Internet and new technologies to boost transparency and introduce e-government in all places, in a bid to abolish bureaucracy, including the posting on the Internet of all ministerial decisions and acts by local and central government.

The premier went on to promise action to clean up social insurance fund finances and clamp down on evasion of contributions, as well as a major overhaul of the national health system, with extra funding and drastic action against wasteful spending and corruption.

A further pledge was the payment of pensions within three months of retirement by the year 2010, an "aggressive policy of protection" for employees against the excesses of employers, a gradual rise in unemployment benefit to 70 percent of the minimum wage and incentives to companies to create new jobs.

In terms of justice and the courts, he promised new ways of selecting the leadership of the justice system with the participation of Parliament, greater independence for courts and a greatly speeded up delivery of justice.

Further reforms cited by the premier were a new election law that "broke up" over-large constituencies and reduced election spending, the building of security forces that respected and protected the citizens, a crackdown on police violence, and fewer police officers detached as guards to individuals, starting with a 50 percent reduction in the guard at the prime minister's office and police provided to guard ministers and other officials.

On illegal immigration, he called for an end to the police-centric approach of the previous government with changes to the system for asylum applications and reception of immigrants, while announcing initiatives by Greece to more evenly share the burden of illegal migration among all European Union member states.

Among others, he announced an end to the deportation of second-generation immigrants until the regime for acquiring Greek citizenship had been fully rationalised.

Pledging to devote an additional one billion euros in the government's next budget to education, the premier announced a radical overhaul of the education system on all levels so that "it attracts foreign students instead of driving Greek student abroad."

He listed a solution of the Cyprus problem as the top priority in foreign policy, stressing Athens' "full support" for the initiatives of Cyprus President Demetris Christofias, and noted that Athens' support for the European accession efforts of Balkan countries, provided that they also respected international law and good neighbour relations.

Good neighbour relations were the key and a self-evident condition for promoting the European prospects of the Former Yugoslav Republic of Macedonia (FYROM), Papandreou emphasised, adding that the Greek government was dedicated to solving the name dispute by finding a mutually acceptable name applicable for all parties.

For Turkey, similarly, he welcomed its efforts to join the EU but stressed that an inevitable condition for this would be that Turkey incorporate Community directives and practices, respect international law and a solution to the Cyprus issue.

"Actions directed against the territorial integrity of an EU member-state do not only violate international law and the obligation for good neighbour relations but also cancel the huge potential for close cooperation between our countries that we look to," he stressed.




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