SEV President Dimitris Daskalopoulos’s address at the BUSINESSEUROPE Council of Presidents, July 14th, 2011

Dear Colleagues,

In this short address I want to convey to BUSINESSEUROPE the concerns prevailing in my country –a country in deep economic, political and social crisis. I have no hesitation in admitting that it was our mistakes, attitudes and conduct that put us in the present situation. But we mustn’t ignore the fact that Greece has taken significant, painful steps to confront the problem. There have been failures which, nevertheless, do not diminish the value of the effort. Personally, I am not aware of any state in modern economic history that has succeeded in reducing its budget deficit by over 5% of GDP in just one year.

We also have to bear in mind that our society’s endurance and cohesion were both sorely tested by the manner in which this adaptation was achieved.

I dare say that in the initial phase, at least, Europe’s handling of the problem was hesitant and uncertain. The policies adopted on Greece were tough on society and economically deficient. To some degree unavoidably, the programme was heavily frontloaded in terms of increasing taxes and lowering incomes. The problem is, this programme was not accompanied by a broader reform of the wasteful and overgsized public sector or by intensive privatizations. This delay is now forcing the Greek government to resort to a new aggressive tax hike that is resulting in understandable social outcry.

What’s more, from here on the necessary reforms will have to be more drastic, deeper, more structural. And the fact is that these reforms will not bring immediate results.

But their impact will be painful for a large portion of our society that has become accustomed to living under the protection –or the tolerance– of the patronage state. For those in this broad category, the great difficulty of adapting lies in having to change attitudes drastically, toppling anachronistic institutions and obsolete stereotypes.

Today, we need to forge new social alliances so that the citizens can consciously accept, embrace and adopt the changes rendered imperative by economic realities. During this time, we need to show consistency and firm commitment to achieving our difficult goals. And we will need the understanding of our partners.

Greece was the guinea pig for an EU caught by surprise, unprepared for crises like this. So the repercussions we are facing are not Greece’s responsibility alone. That is why the growing trend toward an ever more aggressive euroscepticism should come as no surprise. After all, in Greece as in the rest of Europe, anti-Europeanism –further nurtured by the crisis– has always lurked on the extreme right and left of the political spectrum. And there have always been demagogues ready to manipulate popular sentiment. But I want to stress that these trends are more a reflection of a lack of leadership and the resulting confusion, rather than of a deeper anti-European stance on the part of Greek society. After all, the social reactions we are seeing in Greece are no different from reactions in other European countries to reforms smaller in scale and social cost.

The Greeks strove steadfastly to become equal members of the EU and the Eurozone, and with the same resolve they will fight to stay part of the European project; in spite of all resistance.

Our people are aware that Europe is the only viable national prospect.

I continue to believe –and this is not just a matter of faith– that despite the problems and open fronts, my country’s efforts can succeed. Without question, this success also depends decisively on the help of the IMF and our partners. But this has also been the case for every country that has found itself in a similar position since the end of World War II. Against this background I find the criticism being levelled at Greece to be a little hasty and unfounded. It is criticism that takes into account neither the whole national picture, nor the whole European picture.

Allow me to elaborate on this last point …

Since its inception, the Eurozone has been strongly criticized for not having a mechanism for dealing with unforeseen critical events and asymmetrical economic shocks. The developments following the outbreak of the 2008 global economic crisis showed how well founded this criticism was, given that European cohesion, the euro itself and even the future of Europe are today being called into question.

The fact that Greece’s problem is threatening to poison the Eurozone as a whole is just a symptom of the EU’s deeper political and institutional problems.

The time has come for us to be more daring, to think in terms of innovation, to plan with vision, so that we can give our institutions –like the Eurozone and the European Central Bank– the economic tools and the capabilities to meet the challenges of our time, with social cohesion as our primary concern.

In fact, the economic goals and the recipes for achieving those goals may be absolutely clear and objective; however the measures impact societies and have implications for the lives of people who are unwilling or unable to adapt to the pace imposed by economic rationale.

Dear Colleagues,

The simple truth is that the European states need to rid themselves of sterile national egoism and move ahead, as one, to thoroughgoing structural reforms to European institutions. Politicians and citizens need immediately a dynamic vision for the next phase in the evolution of the European dream.

Europe was a promise of convergence, growth and prosperity to its citizens. Today, the citizens of Europe need to regain the certainty that this is still the road we are on.

We mustn’t forget that the convergence of European societies is a prerequisite for the real convergence of European economies.

But even more, let us reflect on our history, which shows that every time the European states chose the solitary path of national sovereignty, the result was disastrous. Personally, I believe that the EU’s choice is clear: it will either transform itself creatively or it will face both failure in the Euro pioneering project and a profound existential crisis. Europe needs to move ahead to real economic and political union.

Note for editors: SEV is a member of BUSINESSEUROPE, the leading independent organization representing European businesses. BUSINESSEUROPE's comprises as members 40 national industrial and employers' federations from 34 European countries, representing more than 20 million small, medium and large companies.