Papademos says Greece will implement reforms

Greek prime minister in Brussels for talks on bail-out and austerity measures.

Lucas Papademos, Greece’s new prime minister, today attempted to reassure the country’s foreign creditors that his government of national unity is committed to a bail-out plan that includes drastic cuts to public spending.

In talks with José Manuel Barroso, the president of the European Commission, and Olli Rehn, the commissioner for economic and monetary affairs, in Brussels today (21 November), Papademos said that his government would provide the written guarantees sought by the leaders of the eurozone on Greece’s reform efforts. But he stressed that it was up to the leaders of the political parties represented in the government to decide on the exact form such guarantees might take.

“There is no doubt that the new Greek government is going to provide this written commitment,” Papademos said in Brussels today. This, he said, is important in order to eliminate “uncertainties and ambiguities”.

Antonis Samaras, the leader of the centre-right New Democracy, Greece’s main opposition party until earlier this month, has repeatedly said that he will not sign any additional pledge on austerity measures, as required by fellow eurozone countries. 

Both Papademos and Barroso said that the Greek government’s main priorities are to conclude, by the end of the year, a second bail-out programme for Greece and to negotiate, by early next year, a voluntary exchange of Greek government bonds resulting in a 50% debt cut.

Papademos, a former central banker, added that the government would also seek to improve the country’s competitiveness. He said that staying in the eurozone was “the only option” for the government and the Greek public.

Barroso said he was “very confident” about the “commitment and determination” of Greece’s new administration, which includes members of New Democracy, the centre-left Pasok, which was in power until 10 November, and the nationalist Orthodox party. But he warned: “We are in one of those moments where, with full respect for democracy, we need to see a country united.”

He added that the situation in Greece was “extremely serious”.

“Less politics and more commitment is what we need,” Barroso said. “When you speak about markets, it’s about trust, and trust comes from implementation.”

This was Papademos’s first visit abroad since becoming prime minister last week. The Greek prime minister traditionally visits Cyprus on his first trip abroad.

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