Handelsblatt Interview (Goerd Hohler) with Prime Minister Kostas Karamanlis

Mr. Prime Minister, Greece again had to revise her deficit figures, this time for the years 1997-99. How do you explain that all the previous data were wrong?

It is true that the budgets for these fiscal years instead of being in surplus had actually been in deficit; the government debt was much higher that reported. Moreover, certain substantial deficits and hidden debts were not recorded in the respective budgets. The so-called by the previous government “creative accounting”, which was applied by the previous governmet, was in fact nothing more than window-dressing and quiescence, a mere deception that transposed economic burdens to the future. Our clear-cut position is that a strong economy can’t be built by deceiving the public or any transnational authority whatsoever.

Based on the true figures, Greece could not have joined the Euro-zone. Do you see that as a problem?

We accepted the truth as the only means to solve the problem. This is definitely a case of ethics and international moral. Both concepts may sound more of a theoretical issue that a realistic approach to how nations behave or in what manner the international system functions. I do believe that such details curve our common future. Mind you that the Stability Pact does not foresee any backward repercussions. In essence and with regard to internal disputes as to the size of the deficit and the public debt the case should be considered closed. It is our responsibility henceforth to justify the policies that led Greece to the EMU.

When will Greece bring down her deficit below the three-percent-limit, and what makes you confident that you will be able to adhere to the stability pact in the future?

We have already embarked on a programme  of restructuring our public finance based on efficiency, transparency and of course reducing bureaucracy. I do believe that fiscal consolidation is not only an urgent need but also the sole option to achieving our economic goals. I’m confident that both our new economic policy and the strict implementation of the budget will guarantee positive results.

Don’t you think that economic data from Greece with be met with mistrust from now on in Brussels?

Our current polices are already recognized by EU institutions as a proof of the Greek government’s true intentions and future credibility, let alone transparency, of our public finance.

On December 17^th the European Council will decide whether to start accession negotiations with Turkey. Are you in favor?

We support the European perspective of Turkey. It is a strategic option for Greece. However, Turkey’s long path to European integration depends as a whole on its own stance and attitude. Respect for international law and the acquis communautaire is a sine qua non for Turkey’s accession to the EU.

Do you expect any other of the 24 EU members to object or put forward reservations, Cyprus for example?

I can only present and discuss my government’s views and options on the subject. I should only point out that during my recent visit to Cyprus it was agreed to proceed on a course defined by EU’s structures and principles.

There has been an increase in infringements of Greek air space by the Turkish Air Force lately. What do you make of that?

Our position on Greek sovereign rights issues remains adamant. I emphasize the fact that such a behaviour is not only illegal but it is also not the least conducive to sustaining a climate of a functional and meaningful dialogue between our two countries.

Do you expect to solve your bilateral differences with Turkey any time soon – and how?

The only legitimate dispute that needs to be settled between Greece and Turkey in the Aegean is the delimitation of the Aegean continental shelf . On this topic, Greece has repeatedly invited Turkey to the negotiation table. Peace, stability, and respect for international law consist the only way to ensure the necessary prosperity of Greece and Turkey and of their respective people; Mutual trust and respect are the pivotal means to achieve this goal.