Ladies and Gentlemen,

My warm thanks for your inviting me to be here with you tonight. It is a pleasure to address such a distinguished audience. It is my pleasure to address all of you, who, with your entrepreneurial spirit and initiatives, are dynamically promoting Greek-U.S. economic relations.

Within the unstable and insecure conditions created by the economic crisis that we are experiencing, organizations like your chamber of commerce have a particularly important role to play; organizations that are not limited by their members’ interests in the narrow sense. In fact, they play their role in a clearly broader social context and undertake initiatives that are useful and constructive for the country’s economic life overall.

Ladies and Gentlemen,

The global economy is in the throes of the most severe economic crisis since the decade of the 1930s. The shock waves that started in the U.S. in the summer of 2007 and gradually spread to the whole world continue to have negative consequences for production, employment and international trade. Just yesterday, it was confirmed at the highest levels that the European Union is in a deep economic recession. Recovery is forecast for 2010, and then only under certain conditions.

I think we all see now that we are not talking about a theoretical crisis that – like others in the past – will come, be resolved by experts, and pass with certain corrections being made. The current crisis is unique in that it impacts the very heart of the global financial system, with far-reaching effects around the world. After over 60 years, the global economy is exhibiting negative growth – and this is following a period during which growth rates were increasing annually on the order of 4-4.5%. The economic, social and political backlash from a reversal of these proportions is unavoidably extensive.

Throughout the world, governments and international organizations are seeking ways to limit the impact of the crisis and redress the balance between the real economy, the financial system, economic indicators and growth.

As happens with all crises, a new balance will be struck. The question is: at what cost? And this is where policy comes in, my friends. I am not referring to the state. I am talking about policy; policy in the sense of responsible governments undertaking action plans aimed at protecting citizens and improving the prospects for their prosperity.

Because this is the only way we can transform this crisis into an opportunity for a more secure and optimistic tomorrow. The answer to the crisis must be policy. Responsible policy on an international and national level. Policy that works towards remedying the causes that led to this crisis; policy that is based on a detached diagnosis of the fallout from the crisis and points to and promotes the needs of the new era opening before us. That, in my opinion, is the great challenge of our political generation: Not just to handle the present crisis, limiting its impact as much as possible, but also to use it as a shift that will allow us to turn, from here on in, towards a new, healthier and more responsible orientation. As economies and as societies.

Ladies and Gentlemen,

To answer the question of how we are to remedy the causes that led to the crisis, we need first to agree on what those causes were.

We can now say openly that in many countries – mainly in the West – after many years of growth and unreasonably low interest rates and cheap loans that were channeled into investments that were not of corresponding economic value in real terms, a prosperity was created that was to a great extent fictitious. Over-lending funded an illusion of wealth, as well as over-consumption that was not founded on real productivity potential and performance. It was consumption with loans that were funded by fictitious value and not the real economy. The relaxed monitoring mechanisms – not just of the state, but also of private enterprise – and, in the end, the failure to avert a value “bubble”, was another serious factor that precipitated the crisis. These two phenomena coincided with the natural – inevitable, I would say – fall of the global economy, which was already late-in-coming in this economic cycle. Finally, the globalized environment of interdependency acted as a catalyst, affecting the speed with which the fallout from the crisis spread, as well as the global extent of the crisis’ reach.

Let’s turn now, briefly, to the consequences of the crisis. We are already experiencing the short-term consequences:

·A slowdown in global growth. For the first time in decades, a fall in global GDP is being forecast.

·A major reduction in international trade that, according to OECD projections, will reach 13.2%.

·An increase in unemployment and limited employment opportunities in general.

·The freezing of many investment plans.

·A major crisis of confidence in markets and a prevailing cautiousness and pessimism.

On the mid- to long-term level, we can agree that a new economic environment is taking shape. An environment that, first of all, will be characterized by growth rates clearly lower than the 4.5% we saw in recent years. There will be less capital available internationally, and it will be more expensive, as confidence in the system has been undermined to a great extent. Moreover, increased financing costs and increased cautiousness lead to stricter financing terms, particularly in the case of major projects and long-term investments. The growth model that was based on irrationally cheap loans has come to a definitive end, at least for our generation.

Of course, as the international system stabilizes, passing into the next phase of the economic cycle, investment opportunities will emerge, along with business activities in new sectors. The crisis essentially marks a phase of reallocation of resources on a national, regional and global level, between sectors and between countries. This fact, in combination with the fall in the values of production coefficients that we are already seeing, will push healthy enterprises towards new productive investments or investments in restructuring (as in the recent buyout of Chrysler by FIAT).

These are the economic preconditions for a normal emergence from the crisis. They are necessary preconditions, but they will not suffice to lead to the final result. Because if we are to overcome this crisis with any finality, we also need to ensure certain political preconditions: social peace – with effective support of weaker groups that are being hit disproportionately by the crisis – and the creation of a climate of stability and international cooperation that will dispel the concerns of markets regarding potential collateral social and international repercussions.

Ladies and Gentlemen,

Dear Friends,

Whatever the individual forecasts and appraisals, there is one common denominator:

The ‘day after’ this crisis will bring us face to face with a new state of affairs. A new reality.

This new reality will have none of the speed, heights or dimensions of the previous era. It will be a more realistic reality; one with its feet on the ground. Hyper-lending, hyper-growth and “easy” hyper-profits – based on equal efforts – are no more.

This is a crude realisation that we should take seriously into account, both personally, at the level of households and consumers, as we have already started doing, and as a country, as an economy and as a society, which is even more difficult given that we need to break with deeply-rooted mindsets and weaknesses.

Dear Friends,

At the dawn of this new era, Greece needs to find new development potential firmly founded on its true capabilities and prospects.

This is the goal of the government’s policy at this difficult juncture for the world economy. In this context, we are following a steady course based onstructured planning, and step by step we are trying to rationalise our economy’s components in order to avoid having an economy with feet of clay, but rather achieve a self-perpetuating and thus sustainable economy. However, the crisis dictates even faster and more decisive action.

In this direction, we are promoting our economy’s competitiveness and externalisation through our structural reform programme, by claiming a better position on world markets. Our public finances have had to adapt to this new state of affairs, so we are now seeking financial stability and a tidying-up of our economy’s main components, which again show significant imbalances due to the crisis.

At the same time, we are promoting important development initiatives, making the most of programmes under the National Strategic Reference Framework and of the new Law on investments, of potential for public-private partnerships. Despite the unfavourable climate, we are also promoting certain long-overdue, beneficial privatisations, as in the case of Olympic Airlines.

But we insist on disseminating development across society in order to support social cohesion. We have realised significant social initiatives, but in a responsible and prudent manner. Without populismand trumpeting. At this difficult juncture, we are exhausting all possibilities, but always within the limits of our economy’s tolerance.

Ladies and Gentlemen,

The triptych “structural changes and development initiatives, financial stability and tangible solidarity with those in greater need” form the basis for the structured plan implemented by the government in order to get the country safely out of the current crisis. In the long run, these are also the main pillars on which our country’s future development course is based.

The signs of the present era are clear. We cannot found Greece’s new development course, as in the past 25 years, on giant deficits, excessive private borrowing, or EU funds.

We have to look elsewhere for the engine of our future development.

We need a complete change of priorities:

First of all, we need to turn towards innovation. Putting an emphasis on innovation is a necessary prerequisite for our successful presence in an utterly competitive environment. In the current financial context, we not only have to compete against our “partners” in the western world, but we also have to face the larger-than-ever impact of the economic activities of 4 billion people living in emerging markets – in poorer conditions, but longing to reach the same level as us. If we want to avoid lagging behind, we have to make a qualitative leap. We have to invest substantially in education and knowledge, in research and new technologies, in green development and incorporating new sources of energy into it: an area where we are lagging behind considerably. We should all invest in innovation: the state, businesses, society as a whole.

A second prerequisite for supporting our development course is externalisation. If we want to keep up high growth rates, we must look for its sources in the promotion of exports, attracting foreign investments, internationalising Greek businesses. Here, I would like to stress that the government as a whole, and the Foreign Ministry in particular, has already been taking action in the direction of an active economic diplomacy, making the most of our extended network of authorities abroad, and of a structured plan for bolstering extroversion in order to open up new paths for our enterprises. This policy’s positive outcome has been confirmed through the leading position of Greek investments in the Balkans, and the important openings towards markets in the Gulf States, the Caucasus and the Far East. It goes without saying that as the world economy gradually finds a way out of the crises, we will continue on the same path towards strengthening externalisation, by constantly creating new development advantages for the years to come.

The third and final point that I would like to touch upon concerns a substantial change in our approach to achieving prosperity and success for our country. For many years, the dominant thinking has been to seek the best possible outcome with the least possible effort. This social mentality is destructive. It considers successful those who are least productive but earn the most by working as little as possible, rather than whose who are most productive and most creative. It is based on the thinking that a scientist is distinguished not by devoting himself/herself to research, but by acting to serve the status quo, being rewarded bygetting promoted. Or it considers a businessperson “renowned” not because they have invested in their business’s innovation and international competitiveness, but have “concluded agreements” by securing privileged relations with the state and with political powers.

Ladies and Gentlemen,

Dear Friends,

The distortions due to this mentality of the least possible effort are visible across all sectors of activity in our country: politics, the economy, sciences, culture, and employment. This mentality weighs heavily on each of these sectors, preventing changes and developments and making sure that nothing works as it should. In fact, it foments and rekindles vicious cycles within our society as a whole: it lowers expectations for every one of us; it destroys our prospects, and increases our pessimism.

This is why things should change. We should break away from this mentality. Now more than ever, we need to invest in creative forces at last. And there are such forces. In schools, in universities, in workplaces, in the business and the political sector, there are forces that want to change all the things that hurt us. With new ideas and a willingness to work to bring about these changes. We need to bring them forward, to give them a say and the space to expand. We need to cross outdated dividing lines and create a new, strong alliance; a system that rewards and promotes consistency, productivity, and initiative; a system that punishes immobility, indifference and living at the expense of others; a system based on the principles of responsibility, accountability, justice and meritocracy.

This crisis will bring each one of us face to face with our weaknesses: the world’s financial organisations, our economies, each individual country. Today, we are being given the chance to remedy these weaknesses and base our future development on new, more solid foundations. This effort on the part of Greece requires effort from everyone: politicians, businesspeople, society. This is the only way to turn this crisis, this difficult juncture for our country, into the beginning of a new, more dynamic course towards development and progress.

Thank you.