The worst of Greece's financial crisis is over but the debt-stricken country must tackle cronyism and cut back on waste to emerge a stronger nation, Prime Minister George Papandreou said. His government has introduced austerity measures and won a financial safety-net from Euro zone leaders to help overcome its debt crisis, but continues to face borrowing costs more than double those of euro zone heavyweight Germany.
"Credibility for Greece has come back. Of course, those are short-term changes. We have to get down to the deeper changes, which we're already doing," Papandreou told Time Magazine, according to a transcript of the interview sent to Reuters.
For the first time since October when his socialist-led administration came to power and revealed the budget deficit had more than doubled the previously announced figure, Papandreou said the peak of the crisis had passed. "I think the worst is over for the crisis that we've had, the sort of peak of the crisis. But there is a lot of work to be done, difficult work," Papandreou said. Time published excerpts of the interview in its April 12 edition.
Papandreou said the Mediterranean state of 11 million needed to fight corruption, eliminate waste, and decentralise the administration to move away from an abuse-prone system in which officials could dole out favours based on personal connections. Euro zone leaders and the IMF say the belt-tightening should prevent the crisis deepening, but a string of demonstrations and clashes between protesters and police last year have raised some concern the government may lose its nerve.
"The pain is still there because the cuts, the wage cuts, the economic measures are biting and people will all feel this in the next few years," Papandreou said. "But if we do what is necessary, we'll come out of this stronger and much more viable. And that's what my hope is - and my belief is - that we can do this."
An opinion poll released on Saturday showed Papandreou's leftist PASOK party maintaining a 10 point lead in popularity over its conservative opponents, despite the austerity measures. But the poll, by agency Alco, also showed about half of the 1,000 respondents were in favour of strikes against the belt-tightening, while 42 percent were not. Some 60 percent believed Greece would finally get over its financial crisis. Greece is struggling to reduce a 300 billion euro debt pile that exceeds the country's 240 billion euro annual economic output, and it has to borrow about 16 billion euros to repay debt and cover spending coming due by the end of May.