In an assessment of the program implemented in our country, when the financial crisis broke out in 2009, and in estimates for the prospects of the Greek economy, Messrs. Joaquin Almunia, Zsolt Darvas, Napoleon Maravegias and Dimitris Tsomokos at 7th Delphi Economic Forum which takes place in Delphi on April 6-9, under the auspices of SA of the President of the Republic, Mrs. Katerina Sakellaropoulou.
Joaquin Almunia, President of the Center for European Policy Studies (CEPS), who also wrote the report on behalf of the ESM, said that not everything was done correctly by either the Greek or the European side. “Austerity was a given, but the issue was tension. “I insisted that austerity was too intense, too great and the path to adjustment too short,” he said, noting that there was no confidence in the Greek authorities, citing the case of the Samaras government, which had to sign the second program in 2014. but he did not.
Mr Almunia also said that Greece’s presence in the euro area was in jeopardy, mainly due to some in Berlin, and that although Angela Merkel did not support Greece’s withdrawal, the German position cast doubt on the eurozone. He went on to point out the need to change the old rules, saying they were no longer credible, noting that public spending should be monitored not by calculations but by variables and that there should be a more reasonable debt-to-GDP ratio.
For future of Greece Mr Almunia said its economy was more exposed due to the size of its public debt. However, he noted that better debt repayment terms and trust in politicians will protect our country from similar risks.
For his part, Zsolt Darvas, a senior Bruegel executive, drew attention to the fact that in the past Greece faced enormous challenges regarding the good use of European funds, calling for an improvement in administrative capacity. Regarding the Recovery Fund, he said that Greece’s plan is diverse and broader than other countries, which may be an advantage but also a risk as it focuses on many different areas. In fact, he pointed out that there is a need for improvement in some areas, such as the digitization of services and research, as we are in the last places in Europe.
Regarding the program implemented in our country during the crisis years, Mr. Darvas acknowledged as a mistake on the part of the eurozone the delay in the reaction by one year to the debt restructuring, while describing the path of fiscal adjustment as overly optimistic. Finally, for the measures needed due to the energy crisis and inflation, he said that there should be no help for everyone, because then the taxpayers would pay to heat the pools of the rich.
Dimitris Tsomokos, a professor at the SAÏD Business School and St. Edmund Hall of the University of Oxford, speaking of a punitive attitude that had an adverse effect on our country, as GDP fell by 29% – the largest decline in peacetime – unemployment rose and about 475,000 people left the country. “If we say that this program was successful, it would be far from the truth,” he said.
“They thought that Greece had handled the situation wrong. “When you kill the patient, obviously there is stability, but he is in the grave unfortunately”, noted Mr. Tsomokos and added that “they wanted to give Greece as an example so that no one would move in the same direction”.
Mr. Dimitris Tsomokos pointed out that after the pandemic that shocked the supply of goods, now we have all the elements of the perfect storm with the private debt to have increased significantly and culminated in the war in Ukraine. Finally, he estimated that high interest rates will not be temporary and inflation will remain high, so Greece, he said, must vigorously negotiate the comparative advantages of its economy, as Europeans had never said they would transfer government bonds from Germany and France in Greece, which, as he said, destroyed the Greek banking sector.
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