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2018 will be a milestone for Greece and the Greek economy

According to the latest figures, Greece's economy has been developing for the first time in the last three quarters

By: EBR - Posted: Friday, December 22, 2017

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Unemployment from its highest rate at the end of 2014 has now dropped by around 7 points, with about 300,000 new job positions and close to the first mark of 20%. In the financial sector, we have achieved a historic, credible adjustment for the first time in the European history. With this positive dynamic, we will welcome the New Year, and therefore, 2018 will be a year - crossroads for Greece and the Greek economy, with the country leaving behind the memorandums in August 2018, and with them, I would say, and an entire era, an entire historical age, and enters the next day with strong growth rates, renewed and, most importantly, with faith in its own forces. Also, recently, a very positive development with strong meaning was the timely closure of the technical part of the 3rd Assessment, and most importantly with the best possible conditions for the country and the Greek society.
Unemployment from its highest rate at the end of 2014 has now dropped by around 7 points, with about 300,000 new job positions and close to the first mark of 20%. In the financial sector, we have achieved a historic, credible adjustment for the first time in the European history. With this positive dynamic, we will welcome the New Year, and therefore, 2018 will be a year - crossroads for Greece and the Greek economy, with the country leaving behind the memorandums in August 2018, and with them, I would say, and an entire era, an entire historical age, and enters the next day with strong growth rates, renewed and, most importantly, with faith in its own forces. Also, recently, a very positive development with strong meaning was the timely closure of the technical part of the 3rd Assessment, and most importantly with the best possible conditions for the country and the Greek society.

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by Alexis Tsipras, Prime Minister of the Greek Government

According to the latest figures, Greece's economy has been developing for the first time in  the last three quarters, something that has not happened since 2006, while the indications show us that the final result will be that of the forecasts, launching a new era of credibility in assessments that has nothing to do with previous years' predictions, especially during the first years of the crisis, when they were talking about marginal growth all the time, but continually recession and most specifically, a deep recession was taking place. 

Unemployment from its highest rate at the end of 2014 has now dropped by around 7 points, with about 300,000 new job positions and close to the first mark of 20%. In the financial sector, we have achieved a historic, credible adjustment for the first time in the European history. 

With this positive dynamic, we will welcome the New Year, and therefore, 2018 will be a year - crossroads for Greece and the Greek economy, with the country leaving behind the memorandums in August 2018, and with them, I would say, and an entire era, an entire historical age, and enters the next day with strong growth rates, renewed and, most importantly, with faith in its own forces.

Also, recently, a very positive development with strong meaning was the timely closure of the technical part of the 3rd Assessment, and most importantly with the best possible conditions for the country and the Greek society. 

More specifically, it is worth mentioning that the agreement, despite the well-known Cassandres, was not accompanied by new fiscal measures. On the contrary, the credibility of our fiscal effort has not only allowed the avoidance of new measures, but also strengthens the structures of the welfare state, with a substantial increase in the budget for family allowances by about 30% on average.

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

The market has already placed the Greek economy to the pre-crisis levels and the green light for the final exit from the Memoranda in a few months from today, the next summer, in the summer of 2018, is lit. This is the scene.
The best answer to all those who cannot accept, cannot understand that Greece is turning page, is the results.

Real facts as reflected in our economic indicators, our credit ratings upgrades, the international analysts' reports, our exit from the excessive deficit procedure during last summer, a historic moment, after nearly 7 years, to the positive reception of Greek bonds in the summer, but also a few days ago from the international market.
Greece has finally gained 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 has been translated into practical support with 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 itself, in the form of well-paid jobs and strong social protection structures.

And this can only be achieved, based on a new and fair production model, while deepening progressive reforms. Because 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 cuts and reforms that Greek society and non-Greek economy need. And we should start this dialogue from now. 

The country must not stop moving forward, changing with bold cuts and reforms. Only these reforms must have our own stamp, 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.

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

This means creating integrated value chains and promoting synergies.

Above all, I would say that, the development process is mainly a social process and we would defeat 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, income, education, opportunities inequalities and access to critical sectors such as health and education. 

The participation of society as an active and component development factor guarantees its sustainability and prosperity in the long term. This is proved by the experience of successful developmental examples, wherever in the world. 

Therefore, development and social justice are not mutually exclusive, conflicting concepts, but I would say they are interdependent and closely dependent concepts.

I am not trying to describe an ideal situation. There are still problems and difficulties and we are called to overcome these difficulties. One of these problems, is the high taxation.

It is a very difficult political decision, under the pressure of the extraordinary circumstances that hit the country and the pressure of our creditors, to leave the long period of deficits that led us to the crisis.

However, our belief when we took this political decision was and continues to be that these conditions cannot be permanent but temporary.

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 take place immediately. In 2019 we will begin to notice the fiscal space created and, of course, this will be based primarily on the success of the economy and the potentials for sustainable growth.

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

Because you already know that this situation did not emerge from nowhere but has deep historical causes being expanded to the post-revolutionary period.

We have implemented reforms that were necessary for decades, such as the independent authority of public revenues, the introduction of online payment systems, the Law on voluntary disclosure of income, measures to combat smuggling of fuel and tobacco, the intensification of controls on government procurements, controlling and restraining ministry spending where possible, and so we now have the opportunity to increase social spending by 30% in allowances and not to cut family allowances. 

Because we cut spending by about 350 million euros in each ministry. Of course, not expenditure that is unpredictable, but those that has proven to be wasted.

To conclude with, I would like to set a call to change our vision, to turn our vision from yesterday, even from today, into tomorrow, and look on the great dimensions. 

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

The current situation allow us to be optimistic, but it does not allow us to rest on our laurels.

*Adapted from his speech at the American Ė Hellenic Chamber of Commerce conference on Tuesday, December 5, 2017

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