–Pledges Loans Will Be Repaid In Full

PARIS (MNI) – The Eurozone must gain greater control over markets
and seek new sources of public revenues to keep pace with the
development of the emerging economies, Greek Prime Minister George
Papandreou said Thursday.

Speaking to a public conference on “new capitalism” here,
Papandreou argued that the sovereign debt crisis was only a “symptom” of
underlying deficiencies revealed by the financial crisis. “The real
problem was one of governance” that cannot be tackled simply with
austerity programs.

The Eurozone’s financial aid for Greece should not be seen as
“charity” since it will be paid back “in full — and that despite all
the doomsayers,” he insisted. But also because the effort has paved the
way for more permanent structures of solidarity. “I hope the Greek
crisis will also become an opportunity for Europe and world,” he said.

Developing in more detail several themes mentioned by his French
counterpart in his opening comments, Papandreou attacked the “myth” that
“markets will solve the problems.”

Although Greece’s consolidation efforts are “on track” — according
to international monitoring bodies — it is “being pressured towards
exclusion from markets” due to excessive borrowing terms, he said.
“Hostile markets” gave Greece “no time” to resolve its problems.

The financial system must be transformed from a tool of “power and
privilege of the few” to an instrument to develop “the common good” and
overcome “huge inequalities” that undermine social cohesion, he pleaded.
Governments must “regulate and harvest the positive powers of markets in
a way that also brings justice and equality for our societies.”

The “missing bricks in the architecture of the common currency”
have increased its vulnerability today, he said. “We can only solve
these problems by closer cooperation, stronger regulation and economic
governance.”

Governments’ financial problems cannot be resolved without stronger
growth, which will require higher investment in research, innovation and
green industries, Papandreou said.

Sources of the necessary financing could be found in taxes on
financial transactions and CO2, he said. He also backed the introduction
of Eurobonds, but not as a “substitute” for fiscal consolidation.

–Paris newsroom, +331-42-71-55-40; stephen@marketnews.com

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