Main messages of VP Viviane Reding at the Citizens' Dialogue in Thessaloniki, Greece
22.03.2013 I have come to Thessaloniki to listen to you and to talk with you . This is the European Year of Citizens. During this year, my fellow Commissioners and I are meeting and talking to citizens across Europe ( dialogues have already taken place in: Austria, Germany, and notably South of Spain, Ireland and Portugal where people also suffer from the crisis).
I am not here to solve all problems. I will be frank: I can't do that. I am here to understand your problems. To explain my perspective to you and to take your point of view with me to Brussels.
There are many discussions in Europe about Greece. There are many discussions in Greece about other European countries. There must be more discussions with the Greek people – and not about them. In Europe, we should talk with each other – not about each other.
I am here as a friend of Greece. Friends should be very frank with each other.
I understand how difficult the past few years have been for the Greek people: the Greek people have made huge efforts and sacrifices. I am confident that the situation will improve soon and that the benefits of the reforms begin to be felt.
The truth is: structural reform is unavoidable here in Greece and also in a number of other countries. This is no time for business as usual.
The results of structural reforms take time. Reforms are indispensable but they cannot produce miracles overnight. The structural reforms – from product and service market liberalisation, to business environment reforms, the fight against tax evasion – have to overcome bureaucratic delays, vested interests and longstanding policy taboos. The reforms are for businesses and for the citizens.
Of course, first of all, all EU countries have kept their sovereignty over economic and social policies. Europe is built both on responsibility and solidarity. European countries showed unprecedented solidarity with Greece. Mechanisms of support were set up in record time. Countries stood up to help Greece. Look at countries like Estonia or Slovakia: even if their minimum wages are around € 300 per month, which is substantially lower than in Greece, they also participate in the solidarity effort. This is solidarity in action. Estonia, by the way, consolidated its public finances (reduction of public sector wages) and has today a budget with a surplus.
In addition, euro area Member States decided last year that any surplus profits from Greek government bonds, purchased by central banks, would be passed back to Greece while the risk continues to be borne by the tax payers.
Europe is built on mutual trust: agreements must be respected and complied with. Solidarity and commitment to reform go together. The success of the reform depends primarily on Greece. This is first of all a matter for the government, but not only. Also the business community and civil society play a crucial role.
But, in the end, the citizens are the key to the success of the reform. Populism and shallow nationalism are not the solution to Greece’s problem. History shows that these are not the way to deal with our collective challenges.
The position of Greece as a member of the euro area has been confirmed and reinforced thanks to determination at national and European level. Doomsayers were proven wrong and those who have bet against Greece have lost: Greece is and remains an integral part of the euro area family.
The EU will continue its support to Greece. Greece is part of the EU and the EU is on the side of Greece using all possible means to help Greece. The EU did not cause the crisis. Decades of trade deficits, loss of competitiveness, unsustainable public deficits, debts and instabilities within the financial system were ignored for too long in the Member States before the crisis. They will not disappear if they are not addressed firmly. Many tough choices to adjust the economy following many years of unsustainable policies which led to the crisis would have been hard to make without the EU. The EU provides collective strength to address them together. The EU is part of the solution.
Growth and employment will come through reforms. A vast programme of structural reform is under way. Greece is making progress. Further progress is required. Deep changes have to occur in a short period of time. It is time to put the economy on track, improve the business environment and use the competitive advantages of the country. Growth comes with reforms which bring investor confidence and competitiveness.
I am aware that it is a painful process. The courageous efforts of today will create the growth and jobs of tomorrow.
Reforms will make citizens’ and companies' lives easier: Let’s talk about the business environment. Necessary reforms include lighter regulation for SMEs and simplification of procedures for setting up a new business. For instance: cutting administrative burden by 50% would allow exports to increase by 10%. Or, let’s take the example of the justice area: the promotion of mediation as part of the judicial reforms needed by Greece will help parties to settle their dispute without clogging up the court system. This is essential to contribute to an investment friendly environment.
Greece is making progress. A great deal has already been achieved. It is up to the Greek authorities to ensure, through determined implementation of the reform programme, that confidence continues to grow. Part of this is the reform of the judiciary and of the tax system and making sure that it is fair, transparent and efficient and that people pay their taxes. In this context, the completion of the land registry, to which the European Commission gives support, is essential to allow fair tax collection.
The EU helps Greece to deploy the Structural Funds: Regional policy is an investment policy. EU funds are currently Greece’s main instrument for public investment. Cohesion policy and other EU instruments should be used to unlock SME financing: jobs and growth will be created by the Greek private sector, in particular by innovative SMEs.
Europe is making every effort to ensure that Greece can deploy its Structural Funds quickly and effectively where the have the best impact. There are many opportunities (energy, tourism, culture, agriculture/food processing, aquaculture…).
EU cohesion funding for 2007-2013 is € 20 billion. The Commission has drawn a list of 181 strategic priority projects with the Greek authorities totalling € 11,5 billion in key areas, from energy pipelines to restoring monuments.
The EU is helping to address youth unemployment: 60% of young Greeks are out of work. The EU is contributing by more than € 500 million to the action plan of the Greek government to strengthen youth employment and entrepreneurship.
The EU is helping people to get primary health care services: EU funds will co-finance free access to doctors, medical examinations, pharmaceutical treatment and hospital treatment for unemployed and uninsured citizens. This will include free vaccinations for children.
Efforts are bearing first fruits: Greece is now at a turning point. Recovery is expected in the course of 2014. Foreign investors from Europe and outside Europe start to show interest in Greece. But reforms need to continue. There is no time for complacency.
Other Member States with reform programmes show the way towards success:
Latvia has asked to join the euro last week.
Last week, Ireland returned to the 10 year bond market for the first time again, Ireland shows: after painful reform, the country will be able to stand again on its own feet by the end of the year.
Also, Portugal is slowly regaining the trust of the markets.
Greece and the Greek people have enormous qualities: a cultural richness which is the envy of the world, a capacity for dynamism and creativity that has been demonstrated through the ages, the most beautiful country in Europe. The Greek people have to be confident about their future and work hard collectively to ensure a good future for the future generations.
More specifically on growth and social cohesion:
The Commission fully supports Prime Minister Samaras' political priorities of growth and social cohesion.
For the recovery and future growth, the situation of liquidity must be improved and doing business in Greece must become more attractive.
On liquidity the outlook begins to be promising:
For each of the years 2013, 2014 and 2015 payments of 4 billion per year from EU structural funds (ESPA) are available for Greece and joint efforts are being made to secure their absorption.
For SMEs more than 3 billion in lending for investment and working capital supported by the EIB and EU structural funds (ESPA) are available via Greek Banks.
Greek Banks are being recapitalised over the next months which will allow them to better serve the real economy.
Preparatory work for an Institution for Growth in Greece has been finalized and such a new financing instrument is now being created.
With the tranches of adjustment program financing the Greek Government begins to be able to pay outstanding arrears of about 8 billion Euro.
The Greek Government and the Commission are working hand in hand in order to make Greece more attractive for business:
Export procedures are being improved with the aim of reducing the administrative burden by 50% and thereby increase exports by 10%.
Streamlining licensing will make investments easier and more speedy.
Cutting red tape and increasing competition will stimulate economic activity and provide benefits for consumers.
Greece is supported in its effort to complete the land registry.
After so many years of recession and sky-rocketing unemployment social cohesion becomes a prime objective of political action in Greece and will be strongly supported by the Commission:
The EU social fund will support temporary employment measures for social and cultural activities in municipalities.
The social economy in Greece must be strengthened, the legal framework has been created and EU funding is available for concrete activities in this sector.
The Commission and Greece are devising a new strategy for making primary health care services available for unemployed and excluded people based on health care vouchers and specialised home health care.
The Commission is working with the Greek Central Bank and the Ministry for Development on microfinance.