George A. Papandreou (born June 16, 1952) is Former Prime Minister of Greece, current President of Socialist International, a Member of the Hellenic Parliament and former President of the Panhellenic Socialist Movement (PASOK). He served as the 11th Prime Minister of Greece from October 6, 2009 - November 11, 2011, after PASOK’s victory in the October 2009 national elections.

George A. Papandreou

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Joint Press Conference Papandreou – Rasmussen

Joint Press Conference of Greek Prime Minister and President of PASOK George Papandreou, and President of the European Socialists Party Poul Nyrup Rasmussen, at the PES Leaders’ Conference

George Petalotis: Ladies and Gentlemen, good evening. We have the honour of hosting in Greece the meeting of the leaders of European Socialists, which as usual is meeting prior to the Summit Meeting, and this time is holding its meeting in Athens.

The President of the European Social Democratic Party, Poul Rasmussen, and the Prime Minister, George Papandreou will begin with their presentations and we will then have a brief round of questions on European affairs.

George A. Papandreou: I would like to welcome to Greece once again our good friend, Poul Nyrup Rasmussen.

We are all aware of the support he has shown Greece in these difficult times. Poul and the European Socialist Party have demonstrated solidarity with our country in these difficult times in the face of the crisis and the impasse we have inherited from the previous government. We thank them for this solidarity. Thank you, Poul.

For the European Union to proceed in this difficult phase of the global economic crisis and instability needs not only effective measures but also the will and the vision as a prerequisite for citizens to be mobilised and for them to understand all the necessary efforts needed for Europe to become a model for collective democracy, economic collaboration, development and creativity.

We are going to address this vision today and tomorrow with socialist leaders who are here in Athens and demonstrating their solidarity with the Greek people.

A short while ago we have the opportunity in the National Council of Pasok to reiterate very clearly that it is imperative for there to be innovative financing tools in order to ensure the future of Greece and of Europe, and if we ultimately want the markets to work for societies, for peoples and not the opposite.

The Eurobond and the European tax on financial transaction would be such a tool. This is what the European Socialist Party has proposed repeatedly over the past months.

I am saying this because we should not forget that we Socialists have achieved much when we had the possibility. We were able with struggles to create a social acquis, a shield of well-being and dignity for every European citizen.

I believe that we Socialists have something more to offer Europe. We believe in Europe, but we also know that Europe has tremendous potential as yet untapped.

This is a potential in the face of crises in the financial system and market forces, the energy crisis, the food crisis and of course the great changes in neighbouring regions, in Northern Africa and the Eastern Mediterranean.

Europe has an important role to play, but if we remain inactive, and adhere to a conservative perspective that market forces will solve all problems we of course negate the forces of Europe.

I am glad that Poul Rasmussen is here because I believe that he himself expresses this optimism in the potential of European peoples, of progressive forces to make changes in the interest of our countries and our citizens.

I give you the floor Poul. Welcome once again and thank you for the solidarity you have shown us.

Poul Nyrup Rasmussen: Thank you very much, Prime Minister. Can I say that I have three messages for you tonight? The first message here from Athens, when all our leaders meet with our host George Papandreou and me will be to the Greek people. We know this crisis, and can I say how much I respect, George, your leadership under this economic crisis of Europe and of Greece?

You know, it’s easy, or relatively easy, to be a strong leader when things are going well. It’s much more difficult when you have a crisis. And I want to say to the Greek people: Don’t blame Europe for what is happening, but blame the conservative majority of Europe.

I am saying this because this is at the same time a message of hope. Things in Europe can be changed. The conditions for the Greek economy can be changed, and better. George Papandreou and his government are doing a fantastic job taking tough decisions with a human and a social face.

But what we see in the rest of Europe, the majority, the leadership of Angela Merkel and Sarkozy is another direction.

So Greece is in the right hands; Europe is in the wrong hands.

My second message is that we have an alternative. Tonight the European Social Democratic Party, all the European parties tonight, will present a new alternative European plan.

We have a growth plan, and we have a plan for fiscal consolidation. This plan will be distributed to you at the end of this press conference, and let me just highlight a few points in a progressive plan for Europe for a way out of the crisis.

This plan is showing that in five years, in 2015, the difference between the Franco-German conservative way and our way will be 8 million new jobs. We will create 8 million new jobs, compared to their way.

If their way is going to continue, we will see an increase in unemployment to 10.7% all over Europe. And this will represent a loss of 2.8 million more unemployed people.

If we succeed unemployment will go down and more people will come into jobs, as I told you.

We will even have a budget consolidation which will be very much the same as the conservatives’. In five years’ time, the conservatives will have a better budget of -2%, from now. In five years’ time, we will have a better budget of -2.5%.

My question to you is, and to Europe: Do you really think that a difference in budget consolidation of -0.5% should be done at the price of losing 8 million jobs? We don’t think so.

And even in the years to come, our budget consolidation and financial situation will be better than the conservative’s.

So my message to you is clear; there is another and a better way for Europe. There are more jobs ahead of us. There are better social conditions, educational conditions, and comparative conditions.

There are 8 million more jobs to pick up, with more or less the same financial results as the conservatives.

My third message to you is, as Prime Minister George Papandreou said, on the European level, we really insist to the upcoming European Council to make brave decisions.

Number one: We need to have a better European financial mechanism. Greece has suffered for so long because the Franco-German alliance have been hesitating for too long a time to ensure that Greece, and Ireland, and Spain, and Portugal, and Belgium, and others would have their loans in a reasonable condition.

My demand to the European Council this time is: Ensure, please, that the European financial mechanism will be big enough so that the market finally will calm down.

My second demand is that we will take a decision on Eurobonds. We think that Eurobonds will be to the benefit of all of us, to Greece, to Denmark, to all of us, also to Germany. This will be number two, which will calm the markets, and we can get the interest rates down.

My third point is financial transactions tax. We must say that those who caused this crisis, the banks, the hedge funds, the financial speculators, – it’s time for them to co-finance our way out of the crisis.

I have one final point to you. The message from the PES, the European Socialists and Social Democratic Party, is, to the European Council: It’s time for you to decide to bring down the interest rate for Greece and for Ireland. Today the following is happening:

The Commission and the IMF are borrowing loans on the market at around 3%, and then they are giving their loans to Greece and Ireland at more than 5%.

Today our message to the Council is: Bring down that interest rate, in our common interest. Bring it down, because you can do it, and bring it down because it’s necessary to bring Europe and all of us out of this crisis.

Lower interest rates, greater room for investments through financing, and economic coordination in the right way – that is the way to go for Europe; that is our common way and, as I assured you, this is our common line. There is a good way for Europe. Thank you very much.

L. Bethani (ERT): My question is to both of you: Do you believe that Europe today is ready to proceed with bold steps towards stronger economic governance?

Poul Nyrup Rasmussen: It depends on what you mean by bold steps. My point is that I believe Europe could make courageous decisions for a better future, with more jobs, with higher growth, with a better economy. Yes, I believe that.

But I have my doubts that the European Council will decide so, because as I told you, there is a political difference between their way and our way.

Let’s not hide that. We are political parties. We are different governments. Let’s not try to fool the populations that this is also a sure discussion about which direction for Europe. A direction filled with austerities and cuts and cuts and cuts, or a direction with new jobs?

That is my demand. I hope that people understand in the European Council in government, that they can make courageous decisions, which will bring Europe further on instead of just a narrow financial perspective, because that will lead us to a bad situation compared to what we could do.

It’s a question of documentation, of argumentation, of making our points clear. But they have the majority, so I hope they will listen to us.

George A. Papandreou: I believe that it is true that the decisions must be bold ones – but in which direction. In Greece our government has taken bold decisions in the face of a very difficult economic crisis. But this was an especial problem of Greece. The crisis in Greece cannot be a model for the rest of Europe.

There are new models. One of them Poul knows well, it is the Scandinavian or Northern model which combines competitiveness one the one hand, since it is one of the most competitive economies in the world and on the other hand combines quality, investment in human resources, in social cohesion, reducing income and gender inequalities, high taxation and the right public services.

There are then alternative models for Europe. It needs courage, but it is also a matter of choice of which model we want for Europe. We the socialist and progressive force in the European Union consider that we must move to a model of social cohesion, green development and qualitative investment in the individual, and that this will the main element of our competitiveness.

Of course we are in a difficult period where emergency measures have had to be taken, but we want to arrive at a completely new model which we consider to be a just and competitive one.

A. Granitsas («The Wall Street Journal»): If you will allow me, I’d like to ask a question in English to Mr. Poul Rasmussen. Earlier in your comments to socialist MPs you said that if Europe did not make bold decisions by the time of the two summits that are coming up, we’ll see another sort of reaction in the financial markets. Are you confident that there is enough time to reach those decisions? How does it look like right now? And if I may address the same question to Mr. Rasmussen, from his own standpoint, does he think that Europe is ready to make those decisions by the time of the Summit? And does he fear that the decisions won’t be adequate to forestall another market reaction? Thank you.

Poul Nyrup Rasmussen: As far as the market reaction is concerned, I think that when Prime Minister George Papandreou talked about bold decisions, I would like to join him, because what we need is to have a decision which is the real response to the crisis, which means that you put enough resources into the financial mechanism. If you don’t do that, then the markets will either be as nervous as they are, or they will be even more nervous.

So this is not a question about not having enough time. To decide to increase the European financial mechanism is already on the table.

So we can do it. Again, as we talked about before, it’s a political choice whether you should do it or not.

You know, the problem with the Merkel pact is it’s just not the instrument for the crisis. And problem number two with the Merkel pact is you cannot use one-size-fits-all. We are very, very different. I don’t need the Merkel pact in Scandinavia. They need it in Germany, but I doubt they need it in South Europe.

But the consequences of the Merkel package will be that the difference between North and South will be increased, you see. Whereas you have the right answers to crisis, putting resources into the financial mechanism, that will be the answer which the market will calm down on.

George A. Papandreou: First of all it is difficult to know whether we will reach a decision and if it will be right one. I consider that it is crucial moment in time for Europe because for a year now at least decisions have been taken but that are insufficient. They are not persuasive enough to calm the markets.

From my experience over the past year in talking to bankers, analysts, economist, leader of states and governments I am convinced that Europe has the possibilities of creating calm on the markets. It is strange that though the markets want this calm often the conservative governments are not able to face the markets they are always talking about, correctly.

J. Stiglitz said to me that to his mind usually the progressive governments can deal with the markets better that the conservative governments because they see them as divine beings, whereas we see them as tools to exercise politics.

The markets want the European Union to intervene with a strong fund, which is flexible and effective. Hopefully the markets will stand in favour of the Eurobonds so that the European Union can manage the debt properly, both collective debt and the individual debt of each member-state, in a way of course which will set us on a safe course to deal with the fiscal issues responsibly and to provide prospects for development, which is what the markets want in order to invest in state bonds.

We have the tools in our hands. Of course the European Union is a union of 17 and of 27. This makes things difficult but it does not mean that we cannot take such decisions. I believe that now is the crucial and historical moment and of course history will judge us. If our decisions are not the right ones as I said in my speech over the next days of the two Summits on the 11th and 15th March, we will see it reflected very soon in the market.

The markets will not simply see the decision but also its development in the future. They will see how it will affect in one, two or three years both the debt and development and the potential of the European Union.

If we take decisions which may sound important today but do not provide a strategy for a changed Europe, this will be reflected immediately in the risks and how the markets manages state bonds, especially in the weaker EU countries. This will immediately create a new problem for the Eurozone.

I do hope that this time we will take important decisions which will calm the Eurozone and we can all embark on a new course, put the crisis behind us and look to developmental prospects.

G. Sideris («SKAI Radio»): I would like to ask how viable your proposal is on financial transactions tax. If this tax is imposed will it not mean flight of capital out of the European Union which Europe needs for investment purposes?

Poul Nyrup Rasmussen: That’s an absolutely justified question. And we have made so-called feasibility studies, where we have said “what will happen if”.

Now, if we introduce a financial transaction tax alone in Europe, on 0.05%, one-tenth of a percentage, this will give Europe about 240-250 billion euros in revenue.

Now, will the banks and the hedge funds and the speculators flee the Euro? We have studied that. We have said: What is the competitive advantage for bankers to stay in Europe, even including a financial transaction tax?

And our result is very clear. They will still earn money. They will still have a very good economy here, because Europe is still the biggest economy in the world, and banks and hedge funds, they say, well, even including the small financial transaction tax, it pays for us to stay.

All our feasibility studies tell us that they will stay. But they will contribute to the way out of the crisis, in their interest also, if you like.

George A. Papandreou: I agree fully with Poul and his analysis. He is one of the pioneers of this idea in the European Union for some time now, not just recently. This tax can bring in substantial revenues which can be used for development, for social cohesion, education and even for the common Fund, for the own resources of the European Union.

I think it is an important proposal which is gaining ground gradually. It is one of the tools which we must use to deal with the economic crisis. Poul said quite rightly that behind those behind this crisis, the financial credit system, the banking system, that this is a way for them to pay their part and to contribute to dealing with this ongoing crisis and recession felt in Greece, but also in Europe.

Al. Salles («Le Monde»): Socialist governments in Europe, in Greece, in Spain or in Portugal are conducting very hard austerity programmes. How could it be a model for European socialists, for you to build something?

Poul Nyrup Rasmussen: If we take George Papandreou’s economic policy in Greece and imagine that a conservative government should find its way, the difference is extremely clear. We see that, even in a very, very difficult situation, in a crisis situation, you still ensure, you still take decisions that you take care of the poorest, that you try to do all you can to ensure a social face, even if it’s difficult, and that your line is a combination of short-term, tough decisions and longer-term reforms.

But I have one addition. Both Prime Minister George Papandreou and I would wish so sincerely that we could act together in Europe. That’s why George has said again and again and again, and I have said it: We need a common European response.

And that’s where Angela Merkel is wrong. I think it’s time for Angela Merkel to really say to herself: It’s in Germany’s interest also to act together with the others in the European Union.

It is not in Germany’s interest to dominate, as they do for the time being. Germany needs to have neighbours, with a good economy, not with an austerity economy. Germany needs to have exports. Sixty per cent of Germany’s exports go to the European Union.

What would she do if she kept her neighbours down in a crisis for many years?

So she has to understand also that, to fight for one’s own country’s interest is also to fight for the whole of the European Union.

So a socialist response, a common one, that is what we are doing tonight: Insist on a common European line, where we take advantage of our economy inter-dependence, where we invest in a coordinated way, where we have our financial transaction tax to co-finance, where we use our common strength to take loans on the market at a lower interest rate than alone.

So the response is: If you are alone in a crisis, you are really, really alone. But if we do things together, we can obtain a better price to the benefit of all of us.

George A. Papandreou: We are going through a very difficult crisis. But even in a crisis there are choices. Not necessarily a wide range of choices but there are choices. We have made the choice of no redundancies in the Public Sector. A conservative government would probably have had redundancies.

We make the choice not to burden the weakest as far as possible. We have set up a different taxation system so that the richest pay more and this will be applied this year.

We have made choices to protect the 13th and 14th wage in the private sector. We have made the choice of protecting public assets, health and education. In these times of crisis we have reduced our deficit by 6% which is a great achievement.

In Greece the problem was not the bloated social system. Of course we did have a dysfunctional social security system and have made changes for a more viable one. Our problem in Greece was the management of our resources and a lack of transparency, -a clientelist capitalist system as I call it.

So we cannot be compared with other countries in Northern Europe. The problems are not the same. We are not a model for other countries to emulate. What you have in America today is a model of inequality and democratic institutions held hostage to a financial credit crisis. America has so many inequalities and many analysts say that the income imbalance created the crisis and all the strong lobbies of the financial system that held politics hostage. We have had such problems in Greece too, and this is a political issue.

Portugal and Spain are not the same as Greece. I think that they are being targeted unjustly as they do not have huge debts and deficits. They may have a problem of competitiveness or with the banking system.

This is where Europe could in a few simple moves, for example with a Eurobond, stop this attack on Portugal and Spain.

We are therefore in a crisis situation, we have taken difficult decisions, but there are other models, as I said at the beginning, such as in the Northern countries which we agree with ideologically.

D. Takis («Μega»): A question to both of you. Prime Minister you said a few days ago in the Parliament that the 25th of March is only a stop along a very long road for our country. And a few days later, Mr. Provopoulos, the Governor of the Bank of Greece said that he fears a second cycle of attacks by the markets if the decision on the 25th of March is not a positive one. There is enhanced fear all round as you will have heard as to what the 25th of March will bring. Do you think that things will be dramatic for Greece if the decisions are not positive ones? What would such a second attack mean for the Greek economy? A question for Mr. Rasmussen. Do you think that Europe, whether conservative or socialist wants to save the country or is it still punishing us for the wrong policies of previous decades and how far will this punishment go?

Poul Nyrup Rasmussen: I think that the lack of solidarity from the dominating conservative majority has been continuing long enough. I think that we must take decisions now, and the most obvious one we should take at the Council meeting on the 25th of March is to lower the interest rates for Greece and Ireland, as I described in this press conference.

There is an economic argument for it. There is a job and an employment argument for it. And this will send the right signals.

And the second decision we should take on the 25th of March, as we talked about before, that is to make the financial mechanism really robust, so it is strong enough to calm the markets.

Well, these two decisions, which can be made without any member countries taking new money out of the pockets, you see, this is a guarantee system, which will mean that we are not asking Merkel, Sarkozy or anyone else to come up with any more money. We are asking them to give a guarantee of solidarity and coherence, with the effects I just mentioned.

George A. Papandreou: It really is a very important milestone. Greece will in any event progress. It will stand on its own feet. It has the protection of the financial mechanism and the programme we are implementing. Of course not only we but the whole of the Eurozone will be affected, positively or negatively from these decisions.

This is why is consider this to be an historic milestone, because a positive decision or volition I believe will turn the page on the crisis which is a continuation of the 2008 crisis and will give Europe the possibility of playing a very important role for its citizens, first and foremost, but also in the broader region.

Think of what is happening around us, in countries neighbouring Greece. Europe is introverted at the moment. I consider that Greece is the outermost point of stability for the European Union, for the broader region, for those countries which very soon will have a need for support, both economic and political in their transition to Democracy – and we hope that this will be their course- or if we have negative developments, to deal with the major issue of refugees.

Europe does not therefore have the luxury to not take the right decisions. I understand the anxiety felt and try to convey this with sincerity, frankness and compassion to our colleagues and all European Union Countries.

Is. Malsang («French News Agency AFP»): Do you think European socialist parties have a say in the Euro crisis, when two prominent members of the family, Mr. Zapatero and Mr. Socrates, are missing today on the family picture, at the very moment their two countries are said to be next in line for a European bailout?

Poul Nyrup Rasmussen: Yes, I do. I think that the European social democratic and socialist family have a strong role to play.

It’s not easy for these two governments of the Iberian Peninsula. As you said, George, they are under heavy, heavy pressure from the markets, and even if they are in a total different situation, they feel the heat from the markets. And I think that could partly explain the reactions you referred to.

But there is at the same time a common approach among us, saying that there is another way; there is a better way, the way I just described to you tonight here. After all, the argument and the policy which is most sustainable one will still be there.

So again, I don’t think that the competitiveness pact is a model we can use, because it’s assuming that we are all of the same structure. But we are very different. It was explained just before that, if you take the Scandinavians, or you take the British economy, and you compare it to the German one or the Eastern Europeans or the French or Greek economy, you see Europe is a rich bouquet of flowers, which you should understand is part of the dynamics, and not part of the problem.

And we cannot all be German export nations, because who should import, then? We need to have an economic balance inside Europe, and that’s why this competitiveness pact, as I said, is based on wrong assumptions.

And I am very happy to see, talking about the socialist family, that the German SPD have said, in the German media but also in the Financial Times yesterday, that they don’t think the Angela Merkel package is the right one. And they have added, which I think is, I would say, extremely important apropos of our common line, they have added also to your information that, if Angela Merkel changes her mind and comes to the Bundestag with a proposal of increasing the European financial mechanism, then the German Social Democratic Party in the Bundestag will support her, a hundred per cent.

So she is not having any problem at home. We are saying exactly the same thing, whether we are in Bundestag or we are in Europe. And at the end of the day, I don’t think that, to be frank and blunt to you, the Spanish government and the Portuguese government will oppose another way.

On the contrary, I know they will not.

George A. Papandreou: First of all we have close cooperation with Jose Socrates and Jose Luis Zapatero. These two countries are going through a very crucial stage and the decisions of the European Union will be decisive for both.

It will be so for us all of course, but we have joined a mechanism. We went through the crisis last year and joined a mechanism which ensures the financing of our country. Ireland has done the same. What might swing the decisions of the two Summits is if Portugal and Spain will be pressured, or whether they will join the mechanism. I think this is not necessary and they should not.

Spain and Portugal are doing the right thing at the moment. They are managing their debts and deficits correctly and have taken other measures as well. It is not therefore a matter of their responsibility, but rather of collective European responsibility as to whether the markets of Portugal and Spain will be forced into the Support Fund or whether they will remain outside and borrow on the markets.

This is why I think this is such a crucial stage, especially for Spain and Portugal. I would like to express my support to the Spanish and Portuguese people for what they are going through at the moment and assure them of our support in discussion in the European Council.

I wish to stress again that we are going through a crisis and taking emergency decisions. However, the competitiveness of the European Union must be one that is based on quality, investment in the individual, innovation, investments in new networks which must unite the common market, and must create cohesion in this market of not 15, but 27 countries and in a few years of even more.

We must therefore join the North with the West and the Central, East and Southern Europe with Euro-networks, with energy pipelines so as to compete with emerging economies which have other advantages, of cheap labour and a lack of social rights, of collective agreements and a deteriorating environment. These are but temporary comparative advantages. This is not the model that we as European Socialist want to promote.

We are therefore going through a crisis. We must manage this crisis. We can manage this crisis and turn over a new leaf and move towards a different Europe. This I think is our message Poul from Athens.

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