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Greek PM promises voters exports to drive economic turnaround
May 20, 2014 / 6:52 PM / 4 years ago

Greek PM promises voters exports to drive economic turnaround

ATHENS (Reuters) - Prime Minister Antonis Samaras, campaigning before EU elections on Sunday, promised voters that Greece could return to pre-crisis levels of well-being within seven years if it stuck to reforms and boosted exports.

Greece's Prime Minister Antonis Samaras addresses reporters at a news briefing in Athens March 18, 2014. REUTERS/Yorgos Karahalis

Charting a new course for the economy, Samaras outlined an ambitious growth model focused on exports to kickstart growth and create thousands of jobs to ease unemployment of over 26 percent.

“We will return to the level of well-being we had before, but without repeating the same mistakes,” he said in a speech.

Samaras’s government last month mentioned highlights of the plan in Brussels, and he was unveiling the plan to Greeks before Sunday’s European Parliament and local elections that mark his first major electoral test since taking power in 2012.

Investors fear a strong showing by the opposition radical leftist Syriza party - which opposes austerity and the EU/IMF bailout keeping Greece afloat - could trigger a new bout of instability that could nip a fragile recovery in the bud.

Samaras’s New Democracy party managed to gain ground in some regions in Sunday’s first round of the local votes but was beaten in the races for Athens and the wider Attica region as voters vented their anger at austerity policies.

Syriza made the run-off in the race for mayor of symbolically important Athens and won the first round race for prefect - similar to state governor - of Attica, which includes just under a third of the population.

In his speech, Samaras implored Greeks to stay the course of stability by voting for the government, which rules with a thin two-seat majority in the 300-member parliament.

“The country is now taking off ... and this is the most crucial moment, a last chance, and nobody will bring it down,” he said. “This is what Greek citizens are called to decide on Sunday: move ahead towards growth, or go back to the crisis?”

Athens is expected to limp out of a six-year recession this year but economists expect the debt-laden country to face years of high unemployment as it recovers from a debt crisis that has shrunk its economy by a quarter.

Samaras, however, said Greece stood to recoup about 50 billion euros of gross domestic product lost during the crisis in the coming years. Reforms to shore up sectors such as tourism, fish-farming, food processing, logistics, energy and pharmaceuticals could add 54 billion euros of GDP and generate 770,000 jobs in the next seven years, he said.

Faster growth could also help gradually reduce taxes without jeopardizing primary budget surpluses, he said, reiterating a goal to cut the corporate tax rate to 15 percent and the value added tax rate to 12 percent from 23 percent currently.

After correcting its key imbalances - its budget and current account deficits - Athens wants to focus on making its 183 billion euro economy more export-driven and lure much needed foreign investment to drive growth.

In the decade preceding the debt crisis, Greece’s economy relied on domestic consumption financed by borrowing, which is now widely acknowledged as an unsustainable model that led to unmerited wage hikes and eroded competitiveness.

Writing by George Georgiopoulos Editing by Deepa Babington and Alison Williams

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