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PM Antonis Samaras: As uncertainty escalates worldwide, Greece's position becoming stronger

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Greek Prime Minister Antonis Samaras was upbeat on Monday as he announced that negotiations between the Greek government and the troika of Greece's creditors had concluded with an agreement clinched late on Sunday night for the disbursement of 2.6 billion euros in bailout loans to Greece.
"As uncertainty and concern escalate throughout the world, Greece is stabilising and its position is becoming stronger," Samaras commented, noting that the way was now open for the payment of the next bailout trance of 6.0 billion euros in May.

The prime minister said that the government's goal for this year was a primary surplus that would allow Greece to ask for a further reduction in debt. He also highlighted a number of positive policy measures agreed with the troika, which he said would help alleviate the difficulties of over-indebted businesses and households.

Among them he listed more flexible settlements with a greater number of installments for paying off taxes and social insurance contributions, new measures for low-income households with excessive debts and the reduction, for the first time, of the tax on property levied through electricity bills, which will be 15 percent lower in 2013.

"In addition, the Single Property Tax that will go into effect from next year, from 2014, will be independent of PPC bills and will be one of the lowest in Europe," he added, also announcing that work to broaden the tax base would start in 2013 and be completed in 2014, ensuring a fairer distribution of the tax burden.

The prime minister said that reductions of more tax rates will be examined at the next review of Greece's fiscal adjustment programme in June, such as VAT rates charged for catering and restaurant services, and announced plans for programmes using EU community funds to support the jobless and households with no working members, as well as the start of pilot programmes to provide a minimum guaranteed income and health care to 100,000 long-term uninsured citizens.

PM: 'Sacrifices beginning to take effect, change is coming'

Wrapping up his statements, Samaras appeared confident that the sacrifices made by Greeks have begun to take effect and that a change, which would soon become apparent to ever more people, was coming.

"I'm not saying that the difficulties are all behind us, far from it. I am saying, however, that the sacrifices are beginning to take effect. That the situation has started to change," he emphasised.

Noting that the government was fighting to bring investments and economic recovery, he pointed out that Greece had already improved its rankings in international competitiveness, climbing up 22 places, that inflation was among the lowest in the Eurozone and that the country expected a bumper year for tourism.

"In a short while, Greece will no longer depend on the memorandums. It will be growth-oriented, competitive and outward-looking. A Greece that is strong," he underlined.

Samaras appeared satisfied with the results of the negotiations with the troika, noting that this was the first time that 'budgetary gaps' were covered without additional austerity measures.

He said that the troika's report acknowledged that Greece was meeting its targets, with both the 2012 budget and the first quarter of 2013 surpassing forecasts, while the payment of overdue debts to the public sector had already begun and bank recapitalisation will be concluded in the next weeks. This will restore liquidity to the market and stop the six-year-long recession, he added.

The prime minister warned that 2013 will be a difficult year because all the failures of previous years had to be addressed and reforms that were decades overdue had to be completed.

"However, we are finally attaining our targets and the programme itself is starting to improve," he stressed.

"A few months ago, we changed the 'external' terms of the loan agreement: we obtained a new haircut of our debt, a reduction in interest rates to about half what we were paying in 2010, a suspension of the payment of interest and nominal capital. We managed to obtain the biggest debt restructuring ever carried out in history. And we did this without an intervening default that had been 'chasing' us for years. Now we are starting to change the terms of economic policy within the country," Samaras said.

The prime minister especially highlighted the fact that, at a time when insecurity was spreading and other countries feared a haircut of their bank deposits, Greece had fully secured the capital adequacy of its banks, security of its deposits and, very soon, also liquidity for the Greek economy.

He repeated that Greece's primary goal was to emerge from the crisis and bailout memorandums but stay in the euro and the 'inner core' of Europe.

Public sector lay-offs

Commenting on a programme to shed 15,000 public-sector jobs by the end of 2014, with 4,000 scheduled to go by the end of the current year, the prime minister clarified that the measure concerned employees "with convictions for criminal or disciplinary offences or who leave voluntarily or whose positions are abolished".

He emphasised, however, that each of these would be replaced by an equal number of younger people chosen based on their qualifications and merit, with one young person hired form everyone leaving.

"This is not the 'human sacrifice', as some claim...it is a qualitative improvement of the public sector. And it is a demand of Greek society," Samaras emphasised.

Last Updated Tuesday, 16 April 2013
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