The signs that Greece’s economy is turning a corner and is on the verge of exiting the crisis are multiplying, Prime Minister Alexis Tsipras said in an article in the ‘European Business Review 20 Years Anniversary Celebrating Edition: Special Report on Greece’ under the headline “2018 will be a milestone for Greece and the Greek economy.”
The celebrating edition was published on December 14 and according to publisher Christos K. Trikoukis, it was Greece’s apparent recovery, slowly but steadily after 10 years of deep crisis and radical change, that prompted the decision “to celebrate our 20 years anniversary with an issue dedicated to the place where the story of the European Business Review started.”
The article, adapted from Tsipras’ speech at the American-Hellenic Chamber of Commerce conference on December 5, pointed out that Greece’s economy experienced growth during the last three quarters “something that has not happened since 2006” and that the signs pointed to a final result in line with the forecasts, “launching a new era of credibility in assessments that has nothing to do with the previous years’ predictions, especially during the first years of the crisis, when they were talking about marginal growth all the time but …a deep recession was taking place.”
He also pointed to falling unemployment and Greece’s historic fiscal adjustment, stressing that Greece will welcome the New Year with this positive dynamic and that 2018 will be a “crossroads” for Greece and the Greek economy, “with the country leaving behind the memorandums in August 2018, and with them, I would say, and an entire era, an entire historical age, and enter the next day with strong growth rates, renewed and, most importantly, with faith in its own forces.”
Based on the OECD’s best international practices and recommendations, Tsipras said, Greece has made changes in product markets, removed bureaucratic obstacles and created a pro-investment climate, while ensuring that the Hellenic Republic Asset Development Fund (HRADF) will “prevent the forced sale of public property, as some people would like or wish.”
“Public property will be upgraded and exploited with the involvement of the private sector, with the aim of creating jobs and generating added value for local communities,” he said.
The green light for Greece’s exit from the memorandum programmes in the summer of 2018 was lit, Tsipras said, while the economy’s results were the best answer for those doubting that Greece was turning a page.
“Real facts as reflected in our economic indicators, our credit rating upgrades, the international analysts’ reports, our exit from the excessive deficit procedure during last summer – a historic moment – after nearly 7 years, to the positive reception of Greek bonds in the summer but also a few day ago from the international market.”
“Greece has finally gained a culture of change and reform,” he said. “We are no longer fearful of the changes and the links to the past interests that prevented progress have been permanently broken.
This recognition has been translated into practical support with the participation in Greek companies, capital increases in listed companies and investments in large projects, Tsipras added.
The government’s aim now was to ensure the Greek economy’s upward trend should have sustainable features in the future and this meant that reforms must continue even after the exit from the programme, the prime minister said.
“Our main goal is to pass the positive effects of growth within society itself, in the form of well-paid jobs and strong social protection structures. And this can only be achieved, based on a new and fair production model, while deepening progressive reforms. Because after August 18 we have no pre-requisites for reforms but we will not stop the reforms. We will move on to our own plan of deep cuts,” he said.
The country should start a dialogue on this from now, since it “must not stop moving forward, changing with bold cuts and reforms,” Tsipras noted, while stressing that these reforms “must have our own stamp, the broad consensus of the productive forces, the healthy forces of Greek society, and of course the trust and consensus of the Greek people.”
The prime minister highlighted the need for cooperation between different sectors, “creating integrated value chains and promoting synergies.”
“Above all, I would say that, the development process is mainly a social process and we would defeat its concept if we limited to the economic field. The market produces new wealth and value but at the same time produces all sorts of inequalities…. The participation of society as an active and component development factor guarantees its sustainability and prosperity in the long term,” he said, noting that “development and social justice are not mutually exclusive, conflicting concepts but, I would say, they are interdependent and closely dependent concepts.”
“I am not trying to describe an ideal situation. There are still problems and we are called to overcome these difficulties. One of these problems is the high taxation,” Tsipras said, while expressing the government’s conviction that these conditions “cannot be permanent but temporary” and that “the exit from the crisis will once again allow the reduction of tax rates.”
“This has already been predicted by what we have agreed and voted in the Parliament, such as the medium-term program, to take place immediately. In 2019 we will begin to notice the fiscal space created and, of course, this will be based primarily on the success of the economy and the potentials for sustainable growth. Our ally is the credible and sustainable fiscal adjustment that we have systematically shaped.”
Pointing out that the situation had deep historical causes spanning the entire post-junta period, Tsipras said the government has implemented reforms that had been needed for decades, such as an independent authority for public revenues, online payment systems, voluntary disclosure of income, tighter control of public-sector spending and others. As a result, he said “we now have the opportunity to increase social spending by 30 pct in allowances and not to cut family allowances; because we cut spending by about 350 million euros in each ministry.”
Tsipras concluded his article with a call to look to the future and the bigger picture, rather than the past, or even the present, and to transform the painful experience during the period of the memorandums into an “opportunity to draw positive lessons”.
“The current situation allows us to be optimistic but it does not allow us to rest on our laurels,” he said.