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I believe that the government will be able to reach an agreement with its European partners, according to which over the next two weeks it will fulfil all commitments and will replace those which it cannot meet with others with the same financial effect. In this way, it will be able to alleviate the strict decisions of the European Central Bank, which needs guarantees to accept Greek government bonds in return for liquidity. In the case of Greece, the guarantee is the bailout.

Therefore, Greece will labour along until it comes to an agreement. It will not be allowed to default through a credit event due to the failure to repay the loan to the IMF next month, but this will involve many difficulties as the loans from the Emergency Liquidity Assistance are expensive and the term bonds are even more expensive, etc. Anyway, this situation cannot continue for a long time.

According to various sources, Greek banks have about 150 billion euro. At the same time, the outflow of deposits continues. How can it stop and what could happen if it does not stop in time?

It can stop only by improving depositors’ confidence, as they have to be sure that there is no problem and there is nothing to worry about in terms of their deposits. In this case, they have no reason to keep their money at home or in the case of businessmen in foreign banks, and they will deposit the money back in Greece. But to be fair, we must say that their actions are reasonable. It is not possible for businessmen to risk leaving their money in Greek banks and being forced to close their businesses if the banks close down. For them this is a matter of survival. All of what I have described is true in the case in which the system is allowed to recover by itself.

However, it is unfair that the people who are aware of the matters and have money had taken care earlier to transfer it abroad. Companies have opened accounts in other European countries and transferred their capital to protect themselves. The same is true for rich people who long ago transferred their money to foreign banks. Now we are at the end of this process of capital flight and the people who go to banks to withdraw their money are small depositors. The amounts that flow out are great because their number is very large.

I do not think that this will lead to the closure of banks. Although there is no available data yet, there are no queues at banks. But if capital flight continues, an alternative solution is to restrict capital flow, not necessarily through haircutting deposits, but through imposing a strict control on the funds that are transferred abroad and restrictions on the money that can be withdrawn from ATMs.

Is there such a probability now?

It was very likely to happen if the agreement with the Eurogroup had not been concluded last Friday. If, at some point, the negotiations with the lenders become complicated, imposing the feeling that they will not lead to a good end, citizens will go to the banks and withdraw the remaining money from them. Then the Greek government will have to impose such measures that will be its own decision and which it will not be able to attribute to the "bad" lenders. It will be a defensive action on the part of the Greek cabinet and the Bank of Greece, which will aim at rescuing the banking system. In this way, the government will pay the moral and material price for the apparent destruction of the Greek economy.

The government lays its hopes on the fight against tax evasion. How much can it rely on this measure in order for money to flow into the budget?

Combating tax evasion involves two stages. The first is to establish the offender who has concealed a certain amount and to verify it, after which the road to the actual receipt of money is very long.

It goes through the court, the debtor's inability to pay, etc. There is no use if the debtor has no money because he has invested it in construction and the state has to seize the building.

Tax evasion can be established relatively quickly and the amounts can be quite high. Such was the case with the notorious expression of George Papandreou, "There is money." He had said that his government expected to collect 31 billion euro from tax evasion. In the end, it managed to collect about 1.8 billion euro over the course of 3-4 years.

I think the new government will apply various methods, including tax amnesty and cuts in tax obligations. They could bring revenue, but they would decrease the verified amount that is due. That is, if I owed 100,000 euro and agreed to repay half of that amount, the state fund would obtain 50,000 euro but the balance would be burdened with 100,000 euro because my entire debt would be written off. So, it takes time to see the result.

However, the fight against tax evasion and corruption essentially are long-term measures, which certainly have to be implemented, but they are not able to solve short-term financial problems such as the payment of the loan to the IMF in March, not to speak of the bonds due to the European Central Bank in July and August. In addition, they are not able to substitute the implementation of horizontal measures such as cuts in salaries and pensions that provide direct results.

Are pension and salary cuts possible?

It depends on how tight things will be. I am reading that the government circles are even discussing options such as not paying in full salaries and pensions in the public sector. For example, paying later the remaining 500 euro of a salary/pension that amounts to 1,000 euro, or paying it in the form of bonds or something else. In essence, the measure is equivalent to a forced loan.