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Greeks have not yet lost the battle for the euro

15 June 2012 / 14:06:43  GRReporter
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Everything depends on the government the country will have on Monday, said Miranda Xafa, an economist and a candidate for deputy from the coalition between the parties Recreate Greece and Drasi, in an interview with Maria S. Topalova.

Mrs. Xafa, have the Greeks lost the battle for the euro?

This will depend on whether we will have a government on Monday that is able to get down to work and implement a programme of reforms in order for Greece to become competitive again. It is incredible that after 5 years of recession, we have a huge deficit in our foreign trade balance. This means that we no longer produce; that we are a ruined economy. Therefore, this is what we should do. Competitiveness is an issue more pressing than debt.

What is different in the economic programme of Drasi and Recreate Greece compared with other parties’ programmes?

We are the only ones to firmly say that the state should shrink; unprofitable state enterprises and hundreds of useless organizations should be closed. We are indignant at the fact that there are cancer patients without medicines and, at the same time, the state has preferred to support services that either have no effect or could cost much less if rendered by the private sector, such as waste collection for example. This is what distinguishes us as well as the confidence needed to reduce bureaucracy, simplify legislation, facilitate entrepreneurship in order to attract investment and create jobs. This can happen only if confidence is restored. As long as there are rumours that Greece will return to the drachma, no investor will put his nice euros in Greece to return them in drachmas later.

If that happens, what would the return to the drachma mean for Greece?

It will be chaos, a useless pain. It is because the reason for the low competitiveness is not wages but bureaucracy, the restrictions posed by the state to the free economy and the labour market. Papademos’ government has adopted some laws for reforms, but they are still only on paper and the question is whether they will be put into practice - for example, reducing the minimum wage by 22% to make Greece more competitive.

European Union policy does not seem very effective. What else could be done at European level to limit the crisis?

The 100 billion loan to Spain is a big help. Ideally, we should have a financial and a banking union. In other words, instead of lending to countries of zero credit ability to provide capital to the banks themselves, Europe will have to lend directly to the banks.

Follow Maria S. Topalova on Twitter

Tags: Miranda XafaRecreate GreeceDrasiEconomic crisisElectionsEuro areaDrachma
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