Page last updated at 18:11 GMT, Tuesday, 15 December 2009

Greece PM Papandreou sets out anti-corruption plan

George Papandreou, 14 December 2009
PM Papandreou has outlined a plan to tackle 'systemic corruption'

A plan to quell Greece's economic crisis will combat "systemic corruption" and "red tape", Greece's PM George Papandreou has told the BBC.

He has held talks with opposition leaders to discuss his raft of spending cuts, focusing on tackling corruption.

The planned reforms would include a 10% cut in social security and government spending, as well as a 90% tax on senior bankers' bonuses.

Trade unions have called for nationwide strikes to protest against the reforms.

But Mr Papandreou urged unity, saying all members of society would have to pull their weight if Greece was to avoid "sinking under all its debts".

Greece has come under increasing pressure to take action over its deficit from the European Central Bank. The country's public debt stands at 300bn euros ($442bn; £269bn).

International ratings agency Fitch last week downgraded the country's credit rating - meaning it thought Greece was now a riskier place to invest.

Cut corruption

Systemic corruption and clientelism - paying money for political favours - had created a sense of the lack of the rule of law in Greece and accentuated issues such as tax evasion, the prime minister told the BBC.

He says his plan will help reduce Greece's public deficit from the current 12% to less than 3% by 2013.

European debt and deficit figures

"Bureaucracy costs 7% of GDP and we hope to halve it by cutting corruption and red tape," he said.

Although Mr Papandreou has a big enough parliamentary majority to force through such cuts, he wants to forge a cross-party political consensus.

Combating corruption was high on the agenda at Tuesday's meeting with opposition leaders ranging from the conservatives to the Communists, which was chaired by the country's president.

Speaking after the meeting, Mr Papandreou said he and the party leaders had been in agreement on several points, "despite our possible ideological differences", Associated Press reported.

However, opposition leaders were less welcoming about the measures announced on Monday.

"What is he asking us to support? His generalities? His delays?" said conservative leader Antonis Samaras, in comments reported by AP.

The Communists, meanwhile, have already made it clear they do not think the financial crisis is a matter that requires national unity.

Supporters of the left-wing PAME union on Tuesday attempted to blockade the entry to the finance ministry, with protestors lowering a massive banner from its roof which read "Rise up".

The carefully choreographed demonstration was the start of what is likely to be a nationwide campaign of industrial unrest, says the BBC's Malcolm Brabant in Athens.

'Change or sink'

On Monday Mr Papandreou had warned that Greece had "lost every trace of credibility" and needed to "change or sink".

A Greek man sells tissues outside closed store
Greece is trying to reassure markets about its economy

He announced cuts in defence spending, pay and hiring freezes for public sector workers, as well as the closure of a third of Greece's overseas tourism offices.

He also called for reforms of the tax inspectorate, designed to remove corruption and end tax evasion.

Many businesses regard the inspectors as all-powerful protection racketeers who threaten companies with audits and heavy fines unless they pay bribes, says our correspondent.

Mr Papandreou says the inspectors will be monitored by a new finance police, designed to guarantee that companies and individuals pay fair amounts of tax.

Markets had a mixed response to the raft of cuts. On Tuesday evening, the Athens Stock Exchange was down by around 2%.

Here is a selection of comments BBC News readers in Greece have sent to us in reaction to this story:

e-mail sent in by reader

If you ask me, not only do I see the glass as half-empty but there is no water at all. It seems that we Greeks live in our own universe believing that our current way and standard of living is our right and the rest of Europe is obliged to fund it. We spent most of the EU funds on useless investments, hiring more and more public sector workers, not caring about the future.

Greece is one of the worst places to invest, we have a low quality educational system compared to the rest of the EU and is a place where anybody can do whatever they like believing that they are above the law. So how can I be optimistic about the future? Are spending cuts necessary? Yes. Are we Greeks willing to make sacrifices and change everything for a better future? No.
Christos E, Volos, Greece

e-mail sent in by reader

These measures are absolutely necessary and in fact should have been implemented years ago by the last government. Even more imperative are the efforts at eradicating the endemic corruption that exists across all levels and in every institution. This is a plague! Finally, the Greek tax code and taxation collection system needs to be modernised and executed in a non-partisan way. Greek society is bedevilled by party politics and favouritism. No wonder the country is in dire straits.
Kyriakos Anastassiadis, Voula, Greece

e-mail sent in by reader

Due to the high level of corruption, it has become normal practice for the public sector workforce to receive alternative compensation for services which should be normally covered via taxation. Cutting public sector funding will only help fuel these deep inefficiencies.
Andreas Papadopolous, Athens, Greece

e-mail sent in by reader

I am a doctor, currently unemployed because I have a waiting period of three years before I start the last part of my residency. At my last post, a state hospital, I was working 13 24-hour shifts per month. Often more than 90 hours per week. I was receiving four euros for one hour of overtime. They still owe me some of that money.

I am currently living with my wife and kid in my parents' home. My parents are facing the second year of a pension freeze. Is this whole mess our fault? We keep making sacrifices to achieve some EU goals. We now have to endure a further 10% cut in social security spending. And then incoming EU funds are somehow lost before reaching ordinary hard-working folks like us. Any suggestions for a way out are welcome.
Theodoros, Athens, Greece

e-mail sent in by reader

Every new government says that economic numbers are a little worse so as to have more grounds for improvement. Of course all measures are necessary, but I am still not convinced that the government strongly wants to fight corruption. Greece is poor, but many people live with good cars and pay for private schools and private healthcare. What is needed is a new national agreement on what kind of society we want.
Theodore Karakasis, Thessaloniki, Greece

e-mail sent in by reader

I will be affected by the measures announced but, of course, I fully support them. Actually, I wish they were bolder. The majority of Greeks are prepared for sacrifices, have no doubt about it. The leftist parties have actually lost votes because of their silly attitude. One thing that should be stressed, though, is how this issue has been blown way out of proportion by the international media.

Newly elected Greek governments do like to appear as saviours, while painting the previous government as the bad guys. That's what New Democracy did in 2004, and the same is being done today. Greece was in far worse shape in 1990 and at the time there was no Eurozone. But the sky did not fall on our heads. I am frankly curious to see what has sparked this media campaign and, of course, hoping for the best, as always!
Labros, Athens, Greece

e-mail sent in by reader

I know the moves are painful, but I fully agree with them. However, I feel that more must be done about tax evasion, probably the biggest problem. As well as the assumption by almost all Greeks that social security (pensions and health insurance) should not cost us much. Both must be dealt with, and while the tax part will only cost some people, the national insurance will cost everyone
Peter Koronaios, Athens, Greece

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