Tsipras sees final straight for a mutually beneficial agreement

May 19, 2015
Written by E.Tsiliopoulos

Greece must finally eliminate the economic distortions and dysfunctions that have undermined the country's course and future, Prime Minister Alexis Tsipras stressed on Monday while addressing the annual general meeting of the Hellenic Federation of Enteprises (SEV).

These were problems that were made starkly obvious when the crisis erupted, yet in the five-year period of the memorandums they had not been corrected but had actually gotten worse, he said.

As the most fundamental of these problems, Tsipras identified the structure and functioning of Greece's public administration, which he said was marked by inability to carry out strategic planning and overlapping responsibilities.

One of the government's primary goals after the end of the negotiations with the creditors was to get to grips with improving these dysfunctional elements without cutting wages and pensions, the prime minister said.

A first step in this effort will be a new organisation of ministries, combined with a simplification of administrative processes and a codification of laws that both the business world and the general public had long demanded. Another major front would be a simplification of the tax system and tax procedures, including a crack down on tax evasion and creating a stable tax environment, combined with a ruthless clamping down on corruption and a speeding up of civil and administrative justice.

The prime minister started his speech by saying that Greece had now entered the "final straight" in talks with creditors for achieving a mutually beneficial agreement and remained committed to this goal, while hinting that this was not always true of the opposite side.

"There are forces that do not want an agreement, with divisive plans for Europe," he suggested and emphasised that Greece was continuing to strive for agreement and had made repayments amounting to 8.0 billion euros, in spite experiencing economic suffocation.

Tsipras said he was hopeful that there were voices which recognised that an agreement concerned all of Europe and that the following days would confirm this conviction, while adding that this rested on achieving an agreement that addressed the problems. He stressed that such an agreement must have a long term scope and include a restructuring of the debt, with a low primary surplus targets for 2015 and 2016, provisions for growth, and definitely ruled out further cuts to wages and pensions.

Another key aim in the negotiations was an agreement that ensured a generous European investment programme, the prime minister added. "The Greek economy cannot depend indefinitely on outside funding," he said, outlining plans to develop the necessary financing tools within the country, such as a Greek 'development bank' to promote investments, announcing the start of talks on such a National Development Bank with all the appropriate bodies.

He said that this also envisaged long-term cooperation between the Greek state and the European Bank for Reconstruction and Development (EBRD), which was expected to soon establish a base and begin its activities in Greece.

According to Tsipras, the dearth of liquidity was neither a choice nor the fault of the Greek government but a "harsh negotiating tactic of the partners".

"Everyone will be called upon to provide explanations," he said, adding that the government's priority was to achieve an agreement that would act as a "great leap forward," leave austerity behind and launch a "virtuous cycle of growth".

He said Greece needed growth that did not rest exclusively on boosting exports but was also based on the country's comparative advantages and primarily its human resources. Among these advantages, in addition to its workforce, he identified the country's natural resources and geopolitical position, including its potential as an energy hub and tourism destination, urging growth based on capital-intensive companies.

"We must not only seize opportunities but also create new ones," Tsipras stressed, adding that everyone would finally be judged by the results. He said the government was "carefully examining" a proposal to join the so-called BRICS bank for emerging economies.

The prime minister also urged SEV to support the government's efforts to restore collective labour bargaining and said the government will soon unveil details of its plan for non-performing loans.

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