ANY QUOTES MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: European financial leaders are working through the weekend to finalise details of a second bail out deal for Greece ahead of a key meeting tomorrow. It comes as a growing chorus of voices suggest that Greece simply can’t survive the austerity measures being imposed on it by Europe and it might be better to allow the country to default and to drop out of the eurozone altogether. Well in a moment I’ll be speaking to the Greek Minister for International Economic Affairs, Constantine Papadopoulos and Labour’s Shadow Foreign Secretary, Douglas Alexander but let me tell you who’s also watching the discussion. They are our Twitter commentators, Craig Woodhouse today, political correspondent at the London Evening Standard, deputy political editor for the Daily Telegraph, James Kirkup and John Higginson, he’s political editor for the Metro newspaper. They provide their reactions via Twitter and you can read those on the side panels, you can also follow on our website, skynews.com/politics and you can join in if you use the hashtag #murnaghan on Twitter. Well as I say, joining me now from Athens is the Greek International Economic Affairs Minister, Constantine Papadopoulos and a very good morning to you Mr Papadopoulos.

CONSTANTINE PAPADOPOULOS: Good morning.

DERMOT MURNAGHAN: Are you confident now that the Greek government can offer the assurances to Europe on the cuts and indeed the structural reforms that are needed to release this next bail-out package?

CONSTANTINE PAPADOPOULOS: I’m confident, especially after the vote last Sunday in parliament where the terms of the new loan agreement were overwhelmingly passed and the signs are that the eurozone finance ministers will accept Greece’s assurances that we will be able to implement the programme.

DERMOT MURNAGHAN: Okay but implementing the programme has been much discussed, involves even deeper cuts, those structural reforms I referred to as well. Is it the case that Greece will now never be able to grow its way out of these problems with such a long term austerity programme in prospect?

CONSTANTINE PAPADOPOULOS: I know the views regarding austerity but this is not austerity for austerity’s sake, it’s to make the country more competitive, firstly via making salary levels more consistent with productivity levels. As you may know, during the past twelve years approximately wages and salaries have grown out of line with productivity so the effort is to bring down these salary levels to the levels of near Spanish levels. The other aspect is to contain costs in the public sector which as you probably know has expanded greatly in the last few years to the point where it cannot sustain itself and that’s where the cuts come in, to make the government’s budget balanced, to restore balance in the government budget. That’s why it is so important to proceed with these cuts and hopefully by 2013 the government will have achieved a primary balance and the growth will come from having a private sector which is more competitive and a public sector which isn’t such a draw on national resources.

DERMOT MURNAGHAN: But proceed with those cuts at what cost though to Greek society? We have seen now for many months, and indeed years, the problems manifested on the streets, are you sure that this will not – as some commentators are saying, go on, continue to threaten democracy itself in Greece?

CONSTANTINE PAPADOPOULOS: Well I think that’s stretching it a little bit. What we saw last Sunday, those horrible scenes of buildings ablaze, those you cannot confuse with the reactions of good Athenian people who actually saw their shops set on fire, cinemas set on fire, that is not Greeks, Athenians, protesting, it is a small group of anarchists. I know that shop keepers also are suffering but like I said, these are the effects of trying to restructure an economy that was largely based on government spending into an economy which is more based on the private sector. Unfortunately this can’t be done smoothly, especially if you have very short time spans in which to do it.

DERMOT MURNAGHAN: Given that anger on the streets, and I know the determination of the Greek government and the majority of Greek politicians to stay within the eurozone despite that being discussed as one option, even if Greece stays within the eurozone, can it ever become and remain a wholehearted member of that union, given so much that has been said, particularly about the Germans?

CONSTANTINE PAPADOPOULOS: Well these are passing phases. You can imagine how any country, any nation would react in the face of such severe measures. I think all things considered it is still very, very encouraging that 70% of Greeks are in favour of staying in the eurozone, only 15 claim that the drachma option would be better. This is very, very encouraging and quite surprising actually under the circumstances.

DERMOT MURNAGHAN: Okay, Mr Papadopoulos, thank you very much indeed for your time, that’s Constantine Papadopoulos, the Greek Minister for International Economic Affairs speaking to us, as you can see, from Athens.

CONSTANTINE PAPADOPOULOS: Thank you.