Greece is finally turning page

Speech at the annual conference of the American-Hellenic Chamber of Commerce

Dear President of the American- Hellenic Chamber of Commerce,


It is a great pleasure to participate in your annual conference and to have the opportunity to share some thoughts about the Greek economy with world-renowned politicians, economists and intellectuals.

Almost three years ago, in 2015, from this podium, we presented our own strategy for the return to recovery with society raised and national emancipation; allow me to say, return from memoranda and guardianship. In my opinion, a national goal for this and I use this term is national emancipation. I have committed myself to this goal and asked for your trust and your support for the joint effort to lead the country out of the crisis and offer a new perspective.

Last year, or two years ago, it was the second time I took part in the proceedings of your conference. I referred to the need to implement an extensive program of reforms and changes across the spectrum of the Greek economy as the safest way to return to sustainable growth. It was then that we undertook, to take difficult decisions, after a difficult compromise, an agreement, but that opened a prospect ahead of us. We fought, we alleviated the weakest during the phase of adaptation, much milder than we experienced in the first difficult times in the first tough period of 2010-2014.

However, we pursued at the same time with this adaptation, mild adjustment, and we made decisions that give a developmental orientation. We have tried and made decisions regarding debt relief. At the same time, we started with a major effort to upgrade the geopolitical role of the country and with coordinated actions we began an international campaign to change the image of the country abroad.

This is the third time that I am among you and I am pleased this time to support – and I think you all feel this, there is no sign of exaggeration to what I will say – that the “time of the Greek economy” has finally arrived. And at this “time” there is a series of positive developments that inspire optimism and mark the positive change for which we have been working for three years. Our strategy bore fruit, most importantly, the efforts of the Greek people were not in vain, and even with the sustainable aspects that guarantee that the country is finally turning page.

According to the latest figures, our economy grew for the first for three consecutive quarters, something that had not happened since the distant year of 2006, while the indications tell us that the final result will be that of the forecasts, thus launching a new reliability to the estimations, which has nothing to do with the predictions of previous years, especially in the early years of the crisis, which indicated only marginal growth but always resulting in recession and in fact a deep one.

Unemployment from its highest rate at the end of 2014 and has now dropped by about 7 points, 300,000 new jobs were created and for the first time it is close to the 20%, a milestone. On the budgetary part, we have achieved a historic, credible adjustment at European times. At this positive momentum, we will enter the new year, and therefore 2018 will be a turning point for Greece and the Greek economy, and the country will leave behind the memoranda in August 2018 as well as an entire era, an entire historical age, and it will enter the next day with strong growth rates, renewed and, most importantly, with faith in its own power.

A rather positive development with strong symbolism happened just recently, it was the timely closure on the technical level of the 3rd evaluation, and in fact under the best possible terms for the country and the Greek society. It is worth mentioning that the agreement, despite the well-known Cassandres, was not accompanied by additional fiscal measures. On the contrary, the credibility of our fiscal effort has not only prevented new measures, but also succeeded in strengthening the structures of the welfare state, with the substantial increase in the budget for family allowances by about 30% on average.

We, also, ensured the priority of employees’ payments working in companies that are in liquidation process by placing order on a regime of uncertainty, while the decisions we took regarding Energy on the basis of best international practices will make a decisive contribution to reduce domestic and industrial invoice and pave the way for attracting large-scale investments and long-term placement. This, of course, will have multiplier benefits to the productive activation of Greek enterprises and, of course, to the reduction of unemployment. Because, let’s not forget, this is the main goal.

Similarly, OECD’s best international practices and recommendations have been based on changes in product markets, the removal of bureaucratic obstacles and the creation of a pro-investment climate. Finally, we have secured through the Hellenic Republic Asset Development Fund that it will prevent the forced sale of public property, as some people would wish. Public property will be upgraded and exploited with the involvement of the private sector, aiming at creating jobs and generating added value for local communities.

The completion of the third evaluation in a positive way, with a positive sign and most importantly in record time, has already created a completely different atmosphere, a completely different picture of the country, in terms of our partners at international level; in particular I would say, to the international investment community. A fact that was most evident today in bond markets, where Greek bond yields of the decade ranged from 5.39% on Friday, fell to 4.81% today, which is the best performance since October 8 2009, since the period before the crisis.

In brief, the markets are already leading the Greek economy to levels similar to those before the crisis and this allows the final exit from the memoranda in a few months from today, the next summer in the summer of 2018. This is the picture.

Of course, you will allow me to share with you because I listened to the introductory speech where there was a reference I believe by your President about the need to create a climate if not of consensus – there can be no consensus; there are different views – at least conciliation on the basics. Unfortunately, there is no such climate. And this great I would say change in relation to what the country experienced, as all of you experienced in the past years, recognize it abroad, the markets recognize it, the investors, unfortunately though some in the country do not want to recognize it.

Even though markets both inside Greece and abroad have proven this.

Even though our partners stress this fact, they publicly acknowledge, some do not want to recognize it. And the worst thing is that they insist on a denial, describing a catastrophe, there times though that undermining of this national effort to exit the crisis reaches its limits.

I will remind you that when, during the second evaluation, there were these well-known disagreements between the institutions, which gave rise to additional demands, many times unreasonable and they were the cause of the delays, and they were accusing us that we did not accept all requirements, despite the fact that many were unreasonable, in order to complete the evaluation in a timely manner and to avoid uncertainty. They are the same people who today blame us that we are completing the evaluation in a rush and we surrender everything.

Generally, no one can understand this criticism. A t the same time they can blame you for just the opposite things.

And of course some even question the obvious, the positive growth rates and the steady drop in unemployment!

And they seek to cultivate a climate that I believe cannot help the country. Neither our efforts to create a positive climate for entrepreneurship, nor a climate of positive psychology, which is necessary for the country to enter the next day. I would not want to stay on this issue. But I think day by day, these attitudes, these positions will be diminishing. For at this moment, I believe that they are embarrassed at the fact that there is ultimately an alternative path to growth that does not go through extreme doctrines; extreme dogmas that want the crash of labour and society.

And on the other hand, of course, it points out the bewilderment in front of the attempt to create the new and replace a worn and corrupt regime that led us to the crisis.

So I will tell you that the best answer to all those who cannot accept, cannot digest that Greece is turning a page, it is not our own words or what I will tell you today, but it’s the results.

The tangible facts of reality as reflected in our economic indicators, our credit ratings upgrades, the international analysts’ reports, in our exit from the excessive deficit procedure last summer, a historic moment, after almost 7 years, in the positive reception of Greek bonds in the summer, but also a few days ago from international markets.

And instead of our own words, I would like to highlight what was said publicly about Greece a few days after our meeting in Portugal, by the responsible Commissioner on the part of the Commission, which, as you can see, is not an insignificant technocrat who did not understand the importance of his words, but is also the European Commissioner for Economic and Financial Affairs,, Pierre Moscovici.

Who made it clear that Greece will be – from August 18 – an equal member of the Eurozone again. Like the members of the Eurozone that exit a period of programs and memorandum, as was the case with Portugal, Ireland, Cyprus, without additional programs. No additional commitments.

This is a historic moment for Greece. After 8 years it will happen. And I want to assure you, friends, that this is the most important answer for us and will be given in practice by life itself. Words and arguments are not necessary.

This time is not far, it is close and it’s not a dream. It is something that we see now in front of us, it becomes reality day by day and will take place in a few months, in the summer of 18.

About two months ago I was in the United States and I had the opportunity to talk, not only with the political leadership, but also with the Greek-American expatriate investors and the Americans. And I want to convey to you a climate that I am sure has been transferred during these days and to your conference, at least this is what the American ambassador just told me, who had the opportunity to meet with some of them.

The picture is that everybody now sees the positive change that has taken place in our country and the positive prospects for the Greek economy.

They value positively the changes and reforms that have been achieved. And most importantly, they mainly point to a change of attitude towards these changes and to these reforms.

Because Greece is finally acquiring a culture of change and reform.

We are no longer fearful of the changes, and the links to the past interests that prevented progress have been permanently broken.

This recognition was translated into actual support with the participation in Greek companies, capital increases in listed companies and investments in large projects.

We are therefore seeking the upward trend of the Greek economy to have sustainable features in the future.

Our main goal is to pass the positive effects of growth within society, in the form of well-paid jobs and strong social protection structures.

And this can only be achieved on the basis of a new and fair production model, while deepening progressive reforms. 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 breakthroughs and reforms that Greek society and Greek economy need. And this discussion must be opened now. The country must not stop moving forward, changing with bold breakthroughs and reforms. These reforms, though, must have our mark, the broad consensus of the productive forces, the healthy forces of the Greek society, and of course the trust and consensus of the Greek people.

So let’s abandon, as we must, this model of state-owned entrepreneurship and consumption of imports with loans and we must reorient the Greek economy to innovation, extroversion and the production of internationally tradable products.

The use of our comparative advantages cannot be relied solely on national champions, but goes through the reinforcement of inter-branch cooperation and interdependence.

This means creating integrated value chains and promoting synergies.

Our country, even during the difficult moments of the deep crisis, relied on Tourism. It breaks all records year after year. However, this will not mean a thing if we continue to drive economic dynamism to third countries through imports of food products instead of supporting the domestic primary sector and agro-food processing. In the new knowledge economy, we can rely on gaining lost ground by investing in research and innovation.

We therefore promote the reconciliation of research with production. Our universities can produce knowledge and value and establish our country at the forefront of developed economies in globalized competition. Human capital is perhaps the most important asset we have and therefore we must not retreat to an obsolete growth model based on work degradation and its role in the growth process.

Financing this effort requires new and flexible approaches. That is why we redesigned the financial tools, increased the PIP, absorbed the NSRF funds without delays, elaborated a modern development law based on the new requirements of the time, and set our banking system on new and healthy basis.

Deposits are flowing back, the climate has changed radically and the issue is important, the big sway of red loans is now being dealt with, it has begun and is being tackled effectively, relieving the real economy from the loophole of over-indebtedness and inadequate liquidity. Restarting large projects on road and rail networks, upgrading ports, investing in digital infrastructure, as well as emblematic investments in a wide range of sectors and in production such as Energy, Tourism, Transport and Construction, expectations are shifting, I believe in the basis of the economy. Let us not forget, that at those we must target, because sustainable growth also involves the horizontal activation of the economy, small and medium-sized enterprises.

In the large projects as I have suggested earlier, I would like to mention that we are promoting very important projects such as the TAP, IGB and East Med pipelines, the development of the Floating Storage Regasification Unit (FSRU) in Alexandroupolis, recently agreed to the US to promote the Eurasia Interconnector, which will unite Crete with Cyprus and the Middle East and, in the long run, I would say, and the Eurafrica Interconnector that will unite Crete with Africa. Projects that I believe will not only stimulate the growth path of the economy but will change the role and importance of Greece in the geostrategic chessboard.

At the same time, however, friends, we made big breakthroughs at a reform level. Business licensing is accelerated to an unprecedented extent by the use of electronic means and bureaucratic obstacles for decades are being removed. The state is modernizing, we are giving a fight to become more effective without wanting to idealize the situation, because always the battle with bureaucracy, the fight with the fear of the civil servant over responsibility will be a daily battle that must be give, but steps have been taken. Rules of law and equal treatment are enshrined. Everyone knows the terms of “play” and there are secret agreements. And I believe that all of this contributes to creating a prosperous climate. They contribute to the return of investment and the healing of the great wound of the crisis, the so-called disinvestment, the investment gap that the country found in previous years.

And in this effort, you know very well, I do not just give out responsibilities and duties, I personally get involved  by creating a task force that is in direct contact with investors and it will be resolved firstly at an inter-ministerial level, with my frequent presence at investor meetings in Europe, the United States, taking advantage of all the possibilities we have in order to convey the message that Greece is investment-friendly and has begun, slowly , but from effectively turn a page and leave behind its structural weaknesses.

Above all, dear friends, the process of growth is mainly a social process and we would minimize its concept if we limited it to the economic field. The market produces new wealth and value, but at the same time produces all sorts of inequalities, in income, education, opportunities and access to critical sectors such as health and education. The participation of society as an active and component factor of growth guarantees its sustainability and prosperity in the long run. This is evidenced by the experience of successful growth examples everywhere.

Therefore, growth and social justice are not mutually exclusive, conflicting concepts, but I would say they are interdependent and closely dependent concepts. We want to inspire this new philosophy of growth both in the country as well as at local and regional level, so we have begun this great effort with regional conferences to set up, together with local communities, local productive bodies, local self-government, development plans that concern each region separately. Growth is everyone’s business, from citizens, local rulers, entrepreneurs, universities to ministers and me. Through dialogue, with an effort to create consensus, without prejudice, we discuss all issues related to the growth perspective of each region.

And as I mentioned above, we are talking about growth in its full meaning. That is, what I might call differently, the overall prosperity of a place that includes financial figures but also quality variables such as work, education, health of a population.


I do not try to describe an ideal situation because there are many difficulties. I am trying to show you the realistic potential of Greece and the Greek economy that is now entering a new era after seven years of crisis.

There are still problems and difficulties and we are collectively called to overcome them. One of these problems, one of these difficulties, is what your chairman mentioned; you are dealing with this as well as a large part of Greek society and of course, it is the high taxation.

It is a very difficult political decision under the pressure of the extraordinary conditions found in the country and the pressure of our lenders to leave and indeed very quickly from the long period of deficits that led us to the crisis.

Our belief, however, was, and when we took this political decision and now, that these conditions cannot be permanent but exceptional.

And 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 happen soon, immediately. From 2019 we will begin to see the fiscal space created and, of course, this will be based primarily on the success of the economy and the potential for sustainable growth.

Our ally here is the credible and sustainable fiscal adjustment that we have systematically shaped.

Because, you know that this situation did not emerge as a surprise but has deep historical causes spanning the depths of the post-revolutionary period.

Loss of VAT revenue is not a new phenomenon for decades,the fragmentation of the tax mechanism,

the smuggling of fuel and cigarettes,

the peculiar tax immunity and imperfection of some privileged,

the socialization of business losses with privileged access to liquidity,

All these were old phenomena that were born and grew in the years of the post0 political transition and, of course, in the years of prosperity and deprived of billions of resources from the Greek economy and contributed to its fiscal derailment.

An international phenomenon must be added to the above, and I refer to the socially unfair, though legitimate, practice of avoiding tax through tax havens.

For us this is not a case where legitimate is also moral, nor does it justify this practice, the institutionalized sometimes high taxation of states.

The taxation of wealth for the provision of public goods and the support of the welfare state is a post-war conquest and a fundamental legitimate pillar of democracy itself, and we must have it in our minds.

However, to return to what I said before, against this difficult reality we faced in 2015, during this difficult negotiation and after our re-election, having told the Greek people that this is the agreement, a difficult one, and inviting them to instruct who will implement it. For the first time in the polls, after the agreement and not before as it used be during the previous governments.

So, in all these difficult things, we did not stay inactive, we did not raise our hands.

We have implemented reforms that have taken place necessary for decades, such as the independence of the principle of public revenue,
the introduction of electronic payment systems,
the Law on Voluntary Disclosure of Income,
measures to combat smuggling of fuel and cigarettes,
the intensification of controls on government procurement,

controlling and restraining ministry spending wherever possible, and so we now have the opportunity to increase social spending by 30% in allowances and not cut family allowances. Because we cut spending by about 350 million euros in each ministry. Not expenditure that is obviously unpredictable, but ultimately expenditure that has proven to be wasted.

But in order to have a sense of spending in 2010 -14, it was the time to remind you where the country lost 25% of GDP, and now we are in the rebound – of course, it is hard  to recover from 26-27%, more years than the first three years of the crisis have to pass, which were enough to lose 25%, we only had a tax burden on the economy of 30 billion, while in the period we agreed on a much milder adjustment and we focused on structural reforms the country and not the budget legal adjustment, the total extra burden of taxes and reduce expenditure did not exceed 3% of GDP. They are incomparable sizes.

All of the above measures together with the return to growth over the medium term, I firmly believe that they will gradually raise the tax burden from businesses and households.

And we will be here to discuss and find out soon!

Before I close, friends, I want to thank you once again for the invitation and the opportunity to address all these to you, I want to invite you to turn our gaze from yesterday, even from today, to tomorrow and see the big picture.

The dramatic period of the memoranda, everything we have experienced, may become like any painful experience an opportunity to draw positive lessons and to reform our forces ahead of the next day for the country.

The data allow us to be optimistic, but they do not allow us to be complacent.

Our country is preparing carefully for its complete return to markets as we approach the end of the memorandum in August 2018.

I had invited you in the past, from this podium, as representatives of the productive forces of this country to join this great effort this great change that is now happening.

Today after three years you understand that we honored your trust.

We initiated communication channels at the highest level and we have always left the door open to discuss proposals and exchange views for growth, prosperity and our common future.

I assure you that we will continue to do so, and now that everything shows that the sacrifices of the Greek people have not been in vain.

And it’s time for us to claim together a better future worthy of the country, the one the Greek people deserve and the healthy creative, productive forces of the country as well. Those who have invested in a positive effort when things were difficult are entitled to be the first to enjoy the benefits of growth now that they enter an easier period.

Thank you very much.