Mediafax (Mediafax)
Finance  |  September 11, 2010 18:12:01

Greek Prime Minister addresses the nation about the economy


Mediafax

Thessaloniki (MEDIAFAX) - Greek Prime Minister George Papandreou on Saturday evening to deliver a speech to the nation in which they should talk about the state of the Greek economy. Informed the agency Reuters on Saturday with the fact that Papandreou will most likely focus on economic growth.

Difficult budgetary conditions of the country do not allow people Greek Prime Minister to offer too happy future. Greece is bound by strict rules under which he received assistance from the European Union (EU) and International Monetary Fund (IMF) loans of 110 billion euros (2.7 billion crowns). This loan was to save the country from an impending national bankruptcy.Papandreova Socialist government was thus forced to sharply raise taxes and cut salaries in the public sector pensions and that it managed to reduce the gigantic budget deficit. However, budgetary austerity measures sparked a wave of strikes and demonstrations.

"Papandreou can not promise any littering because he's budgetary conditions allow it. Can not expect him to talk too optimistic, which could reduce efforts to improve public finances," said political analyst George; Sefertzis. "I expect that it will talk about that (fiscal) operation must succeed, but that the patient has to survive," he added.

Experts now waiting to see whether Papandreou will speak on the release of the budget, which would on the one hand to reassure the public, but on the other hand, could upset international lenders.His speech is to begin at eight o'clock in the evening local time (19:00 CEST) severořecké in Thessaloniki.

Greek media reported that Papandreou is likely to devote a major part of his speech to convince of the need to restart economic growth and to attract investment, which should be a way to lead Greece out of a deep recession and then begin to create jobs. During Friday's meeting of the Greek Minister Papandreou asked his ministers to prepare action to help businesses increase the interest in investing in Greece.

"We expect a signal that the country will be introduced stimulus measures," said Telemachus Pentzos, manager of exporting food. "We are under very strong pressure of competition and the current investment measures did not help much," he added.

Greek unions, which are due to austerity measures the government has met several times this year, several large protests planned and according to analysts, these demonstrations could start a new season of protests against austerity measures.

Police on Saturday moved to Thessaloniki over 4000 police officers. They have to prevent the demonstrations escalate into violent protests. Expected wet weather, however, could at least partially mitigate protesters aggression. Local shops to make sure their windows boarded up with wooden boards.

Before then the right-wing prime minister Costas Karamanlis broke the tradition of generous promises that Greek politicians gave in Thessaloniki for its citizens, and announced a pay freeze in the public sector. This, along with a series of political scandals, helped Papandreou Karamanlis shortly after the election defeat.

According to analysts, could now provide its citizens with Papandreou at least a loosening tight budget, but will mainly focus on the growth plan for next year and the Greeks will try to offer more travel out of the crisis for the next year.

Household consumption in the country was hard hit by reductions in public sector salaries by 15 percent and reducing pensions by 10 percent. The rate of value added tax also grew by four percentage points to 23 percent.

Experts expect the country's economy this year will fall by four percent. Unemployment in July to 11.6 percent ingrown from 8.6 percent in the same period a year earlier. Because of the recession is already leaving the country as the German supermarket chain Aldi, or the French FNAC.

Although the international lenders Greece applaud the government's plans, austerity measures have already had an impact on the actual budget revenues. Thursday's data showed that for the first time the government failed to fulfill his plan, which has a budget deficit this year reduced by 39.5 percent.

"Markets are worried that the government can not find a way to reignite the economy and ensure sufficient revenue for the budget," said one of Athens' economic experts. "Greece will find a way out of the dark tunnel, but only if it is to find the way to succeed," he added.

David Vandrovec, vandrovec@mediafax.cz

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