The road ahead
Spyros Mourelatos
Issue No. 13390
Deputy Economy Minister Stavros Arnaoutakis is faced with the unenviable task of having to do more with less.
Given the vast tracts of government spending cuts designed to rein in Greece’s debt and deficit, Arnaoutakis must find a way to stimulate growth during a deep recession.
Still, the minister remains hopeful. Part of his strategy for improving Greece’s lot includes making better use of the European Union’s National Strategic Reference Framework (also known as ESPA) - structural funds designed to narrow the development disparities between member states.
The goal, Arnaoutakis told the Athens News, is to increase the ESPA absorption rate fivefold. It’s already been doubled, he said.
In a wide-ranging exchange, the deputy minister said the Pasok government is learning from its mistakes, will make ministers more accountable by more closely examining their assets and added that the EU-IMF bailout package has given Greece much needed breathing room.
Athens News: How has the government agenda changed following the activation of the EU-IMF support mechanism for the Greek economy?
Stavros Arnaoutakis: The support mechanism is a way of directly giving ‘oxygen’ to the state, as well as of relieving the markets. Consequently, and after the agreements reached with the European Union and the International Monetary Fund, we managed to get the time needed to put into practice all necessary measures which will enable our country to face the future with hope and optimism.
The decision the government took was a harsh one. The immediate cut of public expenses was a must to avoid bankruptcy and to continue paying salaries and pensions. We prevented the worst from happening.
It ought to be underlined that most of the measures we engaged in for the coming years are nothing but necessary structural changes, for which the country has had a real need for decades.
Such changes will help Greece move beyond all the negative practices which led to the current situation. This is the priority. There is no other way to turn the crisis into an opportunity, and we cannot afford to let this chance slip through our hands.
The prime minister has announced a package of institutional changes designed to bring confidence to the domestic political system. Are these changes alone likely to appease public anger at some of the austerity measures and succeed in rebuilding credibility in the political system?
The wall of distrust as regards politics and politicians is a fact. The democratic deficit observed in Greece originates from it. We intend to radically reform the system by adopting legislative and administrative measures capable of dismantling the fortress of excess bureaucracy, of never-ending administrative processes, of lack of transparency, of delays in decision taking.
Once in place such measures will have to be implemented and become part of everyday public life. As the prime minister has repeatedly asserted, impunity must cease to exist in our country. This is a badly needed major change and concerns both concrete behaviour and mental habits. It is a challenge the government is strongly committed to meet.
Do you think that the establishment of a committee to investigate recent political scandals will be enough to alter public opinion that politicians act with impunity?
Our collective interest may be served only if each and every one of us assumes their responsibility, the government first and foremost, with the goal to build up a solid framework based on the rule of law and on the principle “justice for all”. This is what we are doing, not symbolically but by means of the most in-depth changes of the last decades.
Transparency across public life is a major issue, and we are pursuing it by reforming the law concerning ministerial responsibility, for instance [looking into ministers’] assets and source-of-funds declaration, as well as their participation in offshore companies.
There are examples from other countries where IMF involvement has had a negative economic impact, with the relevant governments going on to suffer crushing election defeats. Can the Pasok government be an exception to this rule?
This is a non-issue for the government. At stake is the present and future of the country, not the maintenance of privileged posts. We have been called to soundly manage today’s crisis so as to guarantee a sustainable tomorrow for the Greek people: this is also the role of the EU and the IMF.
We would rather fall [as a government] while contributing to the country’s recovery than... survive within a bankrupted state.
What are the reasons for the delays experienced in various areas of government work? Can they be treated by means of the corrective action proposed or do the problems run deeper?
Everyone is well aware of the efforts deployed to save our economy since we took office. These efforts were aimed at saving our country from bankruptcy. This involved harshness and pain. We have been, so to speak, forced to save Greece first in order to be able to effect change afterwards.
When you find yourself cornered, it is natural for mistakes and delays to occur. We will not deny making them, as others have done. On the contrary, learning from one’s wrongs ensures greater efficacy in the future.
What are the prospects for economic growth this year, given the cuts to the public investment programme? Is this year’s target of 15 percent ESPA absorption feasible?
It must be crystal clear that we inherited an extremely disappointing situation as regards the National Strategic Reference Framework [or ESPA]: complicated procedures, excessive bureaucracy and absorption of EU funds close at just 3 percent.
In spite of this, we have managed to double the absorption to almost 6 percent within six months. And thanks to the freshly passed bill, we have drastically simplified the same red-tape procedures which had glued the NSRF to the starting line.
This is only the beginning. We will accelerate reforms of the regulatory framework, which guides entrepreneurship and development, with both general and specific provisions so as to turn the country’s economy towards where its productive and competitive future lies - that is to say tourism, renewable energy sources and quality foodstuffs.
More specifically, with regard to public investments and NSRF, only for 2010, a total of 9.2 billion euros will be channelled into the economy.
We agree with the prime minister when he says that Greece has enormous, unlimited possibilities, which are there to be exploited. Such potential has to be turned into capacity, with emphasis on creating the ideal environment for encouraging healthy entrepreneurship and attracting foreign private investments.
ATHENS NEWS 17/05/2010, page: 7
