Ambassador Kaskarelis addresses Capital Link Forum December 2nd 2010

“REFORMING GREECE: OPPORTUNITIES AND CHALLENGES”

Good morning,

It is my great pleasure to be joining you this morning. I am confident that this will be a productive forum, as it has been for 12 consecutive years, providing a much needed venue for cultivating relations between the Greek and American business and investment communities. For this, we have to thank Nicolas and Olga Bornozis, the heart and soul of Capital Link.

At this point in time, as the international community, including Europe and the U.S., is confronted with an economic crisis of profound dimensions, such fora take on added value. Furthermore, because of this crisis, we are called upon to reconsider and re-assess the manner in which the world has traditionally dealt with some fundamental political, social and fiscal policies.

In the last few months, weeks, days, with Ireland and other countries coming under tremendous economic pressure, the urgency of the matter is becoming more and more clear and more intense.

A lesson learned at this difficult juncture is that, without a doubt, all countries are intertwined and interconnected in such a way, that the fate of one is linked to that of many others. No country or society is a remote island that can remain unscathed by events in the rest of the world.

Nowhere is this clearer than in the European Union. And without downgrading the gravity of the situation, we must acknowledge that the economic struggles confronted by individual EU member-states have provided an opportunity for the E.U. to rise to the occasion and develop into a more solid union.

If it perseveres and acts in unison, it can emerge with new and clear methods for confronting these and future crises, enhancing its response mechanisms, putting in place structures and reforms that make it a more unified union, ultimately realizing that we are all in this together.

With Ireland and other countries following suit, the Greek problem is no longer an isolated problem. And while there is no doubt that these countries bear the brunt of the responsibility for their economic hardships, perhaps this is an opportunity for the financial “powers that be” to look at their own speculative practices, and conduct business not simply on the basis of cold numbers, but also taking into account ethical and moral responsibilities, realizing that what they do has ripple affects around the world.

In such a climate and in light of this global economic interdependence, and given the particularly harsh economic realities in Greece, bringing together Greek and American buisnesspeople, including Greek American entrepreneurs, cannot but be a productive venture.

I am optimistic, if not certain, that the discussions and brainstorming that will take place during this forum will provide great insight into the many reforms and initiatives undertaken by the Greek Government, and the progress thus far achieved in making the necessary adjustments. And, without a doubt, there has been serious progress.

Greece is no means where it needs to be. Yet, to paraphrase our Prime Minister, George Papandreou, for a country that only a few months ago was universally considered to be in a freefall, Greece has succeeded in overturning expectations and reversing a downward spiral.

The Government and the people of Greece have set out on a difficult journey of tough measures, a long process of re-evaluating longstanding habits and traditions, not only to confront this unprecedented financial crisis, but also in order to lay the institutional, legal and ethical groundwork for a new era, a new way of addressing issues of governance and practices.

Being at the receiving end of some of these harsh measures, I can assure you that this is for real. There is no magic formula in tackling these problems. We are doing it in a hard way, by cutting down public expenditure, cutting public sector wages, private and public sector pensions, increasing taxes. These are difficult and painful measures.

Reaching the ultimate goal of making Greece a solvent country now and for the future also presupposes that we are open and honest about chronic and deeply rooted problems and bad practices, which, unless tackled, will bring us back to square one.

The crisis must be faced on many fronts. The Greek government is not only determined in making major institutional reforms, but has already made concrete progress, with concrete examples and results. It is also committed to total transparency and to wiping out tax evasion, having approved laws or in the process of drafting and submitting laws to Parliament on many of these issues.
Just to mention a few of the reforms, closed professions are opening up, major changes are being instituted in the tax system, having already passed a law; there are reforms minimizing loopholes and scope for tax evasion, but also redistributing income in a more sustainable way.

There is a new budget system that doesn’t allow for hidden deficits; We have managed to promote reforms to ensure the pension system’s viability, whereas similar efforts by other countries have been met with great internal opposition and difficulties; the pension system itself has been overhauled. In addition, laws have been passed for green development, opening up the country to new areas of comparative advantage.

Ladies and gentlemen,

With all its problems, Greece still possesses certain positive fundamentals that remain solid, and which the Greek government intends to take advantage of. To begin with, Greece’s strategic geographic location is a tremendous asset, a bridge, a gateway, between east and west, north and south.

It is a logistics hub for a wide geographic area, including Southeastern Europe, the Mediterranean, the Middle East and the Black Sea. It is also a global tourism destination, an emerging regional energy hub, a leader in global shipping, with information technology know-how, with important sources of renewable energy, expertise in biotechnology, and real estate. There are those that recognize that potential. For example, China didn’t just choose, out of the goodness of its heart, to invest, among others, in Greek port facilities. It did so because it recognizes the potential and strategic location of Greece's abundant port facilities, which make it a gateway for China into the Balkans and Europe.

Greece also holds great potential for U.S. business, as it combines all the above referenced sectors, with highly skilled human resources. And, with the IMF and EU guidelines and daily monitoring, changes are being carried out to provide the best possible options for such investments. The mere fact that with us today we have Mr. Pampoukis, Greek Minister for Investments, is indicative of the importance the Greek Government places on investments.

Aptly titled, “Reforming Greece: Opportunities and Challenges”, this year’s Capital Link Forum can help enhance the groundbreaking work being done by the Greek Government and the Greek people, by helping Greece showcase potential.
I thank you for your time and attention. Wishing you the best in your proceedings, I look forward to your conclusions.