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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The real problems have to do with the need for growth

Speech (extracts) at the Meeting of Leaders of socialist parties of South Eastern Europe at Salonika

“Well, let me begin, first of all, by welcoming you. It is a great pleasure to have you here in Thessaloniki.

I believe it is a very important occasion, because of the upcoming, first of all, Congress of the Socialists International in Cape Town, where we will be able to express our voice, our Balkan voice, if you like, the voice of the Southeastern Europe in this process.

But I would like to welcome you all personally, Milo, Georgi, Radmila, Corina, of course Georgi again, Edi and of course Boris, Luis. Yesterday night, we had a wonderful evening, some of you had not arrived, and we want to thank again Mr. Gerovassiliou for his hospitality to try the beautiful wines of northern Greece. Today, we will be hosted by the Mayor of Thessaloniki in lunch, Mr. Boutaris. He happens to also be a winegrower, a well-known winegrower; but this is a region that has very beautiful products, but Thessaloniki is also a very beautiful city.

It is of course hit, as many other parts of Greece and parts of this region, by the financial crisis; so I think one of our messages should be of solidarity to the people of the region in dealing with this difficult crisis and how this affects our countries.

One of the, of course, important issues that the financial crisis has created in Europe is a question about the enlargement, the enlargement of the European Union. This is a region which we believe must be part of the European Union. Some countries of course are already members, but there are also many in the Western Balkans that are still waiting. Milo, congratulations for Montenegro and the beginning of the accession talks.

2013, next year, is ten years after the Thessaloniki conclusions of the European Union. We had then the presidency and one of the major issues was how we promote the accession of the countries in the region to the European Union, as a prospect for our peoples, for prosperity, for democracy, for the protection of human rights, the protection of minorities, the protection of rule of law.

And 2014 is 100 years since a difficult event that took place in Sarajevo and the beginning of World War I and we had always said that we should turn this around and make it a positive message of showing integration for this region.

I say this, because of course with the financial crisis there is a lot of – how would you say – integration fear in other countries, and I think what our message as progressives in this region is, is that we can bring out the best that we have. There are difficulties in the region, there are sometimes conflicts, there are differences; however, we as progressives have always been able to bring out the best of our countries, the best of our peoples and also the spirit of cooperation. And I think this is one thing we need to show as one basic message.

One of the ideas we had discussed a little bit yesterday is use this year, up to 2013, to highlight the prospects of revisiting the decisions of Thessaloniki, concerning the western Balkans and of course the wider region.

A second problem that I think we need to discuss is the fact that with this financial crisis we have seen the rise of extremism, populism and easy scapegoating. Saying, “Ah, they are to blame,” “The others are to blame,” and so on; and particularly the rise of racism and prejudice inside the European Union and inside our societies.

And I think as progressives we have to say that the real problems are somewhere else. The real problems have to do with the need for growth in our economies, the need to become more competitive of course, but more competitive not simply through trying to compete with other regions of the world, by lower wages; we have to begin to produce quality products, to use our strengths in our societies, in order to make sure that we maintain social cohesion and prosperity.

This is a view which is not always the orthodox view that is taken, but I think this is very important. And we also have to highlight that there are big issues in our capitalist system, deep inequalities globally, even in Europe, even in our societies, which have to be dealt with. Lack of transparency, the banking system still has major problems after the 2008 crisis; it is not working, it is not investing, it is not helping growth. This is something we all see.

The financial system worldwide, which is affecting us, for example rating agencies. A Parliament will make very difficult decisions – whether it is in Greece, or in Spain, or in Italy, or in Portugal, or other countries – decisions to put our economies in order, but the rating agencies that did not see the crisis coming are now overly negative and see any risk and then they down-rate your countries and almost annihilate your efforts, creating more uncertainty.

So these are the issues, these are the types of issues we need to deal with and these will not be solved, if we try to find scapegoats. And the conservatives, it is not only the extremes, but the mainstream conservative parties in Europe have great responsibility for developing, for creating this sense of scapegoating.

When you hear from mainstream parties that, “Ah, the Greeks!” or “The Southerners! They are the lazy ones,” and I say here very quickly, when that was said when I was Prime Minister, I looked at the statistics in the OECD and I found out that the Greeks, of all the OECD countries, are number two in working hours after the South Koreans. So these are easy stereotypes, which do not solve the problems, but they undermine solidarity and they undermine our common goals and our common pooling of our common strengths.

That is why I think that we have to bring out a message that by scapegoating migrants, by racism, by trying to create divisions between Europe, this will not solve our problems. We have to pool our strengths. And then, yes, we can deal with the financial crisis. Then, yes, we can deal with the global warming issue. Then, yes, we can deal even with migration issues, integrating, but also seeing how our borders are better protected. Then we can deal with crime and corruption and issues like this.

So targeting the weak is not going to solve the questions, unemployment is not going to solve the questions; inequality is not going to solve the issues of rule of law. And this, of course, goes to the core of another issue, which I think is important, and that is democracy.
In our democracies, we need to strengthen our institutions at a national level, but also in the European and global level. And this means the rule of law, it means the strengthening of our parliaments, of the elector systems, making sure that our citizens are represented, are heard, transparency with media – media is very often captured by big interests – and this of course is a threat to democracy and often feeds on extremism.

I know that in your countries there have been some important political events. We would like to hear the latest developments in Rumania, also the issues in Bulgaria from our sister parties. Edi, your continual struggle for fair elections in Albania; Radmila, you have questions of course and issues of free media and others, and of course, Boris, we will be very interested to hear of what is happening in Serbia after the elections and the developments there. Again, as I said, Milo, congratulations for the accession discussions.

So we have a lot to talk about and as soon as the media go, I will open up the discussion. We will be able to have two to three hours to discuss and come up with some messages and then we will have I think a very nice discussion also over lunch with the Mayor of Thessaloniki.

Again, let me also thank for the hospitality those who are hosting us, the Mayor of Thessaloniki, but also the people of Thessaloniki, who are always very hospitable and particularly for all the neighbors in the region. So I hope you enjoy yourself here.

Thank you.

•••

I have always said Greece is responsible for not keeping its house in order, and this concerns particularly the previous government, which was there for five and a half years, the conservative government, for allowing the deficit to go so high and the debt to almost double.

We had to face a triple, I would say, challenge. The first was that we had to deal with the major reforms and changes to create a productive Greece, a viable economy, a transparent governance; because Greece is not a poor country, but it was certainly a mismanaged country.

So that was the first thing and that was the major thing and that is still the major issue to continue reforms and changes, in order to make our economy viable and robust for our people.

The second of course was that we were under the pressure, not only to make reforms, but to cut as quickly as possible, because of our obligations to our creditors, to those who lend money.

Initially, we had no mechanism of support. Finally we did, from the European Union in the combination with the IMF, but still the time was very short. So we had very high pressure on cutting, cutting, cutting.

I was talking some days ago with Gerhard Schröder, who is the architect of what Germany is today, and he was saying to me, he said it would have been very difficult for him to have both major reforms at the same time with deep austerity. And I think that was one of the big problems we had in Greece.

But other than austerity, the third challenge was the uncertainty. And you don’t see that in the economic indicators. But uncertainty – and I know many of our countries in the region know what uncertainty means – we had uncertainty, because everyday people were saying “Is Greece going to default? Is Greece going to leave euro?” That is more corrosive often than even austerity itself.

Why? Because people don’t consume, people don’t trade, the banks don’t lend, people don’t borrow and people don’t invest. And it is not only Greeks that are not investing, but also foreigners, who are interested in investing, are waiting. So for two, two and a half years, we had a paucity of investment.

This is where of course Europe, the European Union has a big responsibility, taking steps, but doing too little too late. We are always one step behind the markets. And had we made some major steps initially as a European Union, in the architecture of the Eurozone, I think we could have quieted down the crisis; we could have quelled the crisis at the beginning.

But now, the markets are much more worried about what is this construction of the Eurozone. Can it work? Does it have the political will? Does it have all the tools? What happens with bigger countries, like Italy and Spain?

So, beyond what Greece is doing – and I have always said this, it would be very convenient for many, if Greece was the problem. But Greece is not the problem. We have a problem, but we are not the problem. The problem is now to make Europe a strong construction; political, economic, fiscal, democratic construction. That is the challenge and we have to do it quickly.

So I think this is also a message for the region – and I think it goes very well with the message we want as progressives, to integrate, but also make Europe much stronger too. So our voice I think is important to say, “Yes, we want to integrate into Europe, but we also want a stronger Europe and a Europe which is capable of dealing with all these major challenges.”

So that is my very short summary of the situation now here in Greece.

Thank you very much.”

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