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Overexposing the demands for Greek debt forgiveness is damaging

30 September 2015 / 16:09:12  GRReporter
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Anastasia Balezdrova

The Greek media have been recently filled with news about the visit of Prime Minister Alexis Tsipras to New York, where he delivered a speech to the UN General Assembly, had the opportunity to meet with international creditors and hold a few-minute conversation with US President Barack Obama.
GRReporter has already presented the responses to the performance of Greece's Prime Minister before investors. According to the Greek media, in the conversation with Mr. Obama that lasted only a few minutes he was able to discuss some important issues with him. Later, during his meeting with representatives of the Greek Diaspora, Mr. Tsipras said that his government had recently close cooperation with Washington, where it found "more attentive listeners regarding the fair resolution to the crisis." Immediately afterwards, he added that this should be achieved "through the necessary forgiveness of the intolerable and unsustainable public debt that has been accumulated during all these years."

At the same time, the tax offices in Greece are preparing to send taxpayers notifications for several tax obligations in October alone. The government has not yet found a solution to the problem with migrants and refugees, many of whom continue to be in Victoria Square in the centre of Athens whereas the reforms envisaged in the agreement with creditors continue to be only the subject of talks and not of actions.

GRReporter asked for comment Greece’s former Deputy Minister of Foreign Affairs Dimitris Kourkoulas. He is a long-time employee of the European administration, where he has held various posts. His appointment as European Commission Ambassador in Sofia from 2001 to 2006 made Dimitris Kourkoulas a good friend of Bulgaria and his feeling continues to this day.

Mr. Kourkoulas, one of Alexis Tsipras’ first actions after his re-election as Prime Minister of Greece was to ask again for public debt restructuring. Do you think that creditors are willing to negotiate on this issue?

I consider unproductive the constant public repetition of the arguments for public debt. The decisions on debt relief were already taken in November 2012. Creditors said then that this process would start at the end of the monitoring and at the point when Greece achieved a sustainable primary surplus. This is explicitly stated in the third memorandum of financial support that Mr. Tsipras has signed.

I think that the continuous statements for debt relief by the Prime Minister and the representatives of Greece are damaging. They are not helping the negotiations and above all, they are damaging to the establishment of the sense of stability that is necessary to attract investment in the country. Claiming that the debt issue must be solved at the time when you are going to the US, saying you want investments, is an oxymoron. The excessive "advertising" of the debt is damaging.

A few days ago, Mr Tsipras said in New York that now Greece is politically stabile and the government is ready to start implementing the reforms agreed. Do you think that this office has the will to make the changes needed by the Greek economy?

The need for reforms is now apparent even to the most dogmatic people in Greece. Moreover, the government has the strong support of the Greek people. Therefore, it will have no excuse not to trigger the reforms in my opinion, and the faster, the better.

If you ask me whether it is able to implement them, the answer is, it can, if it wants to and if it believes in them. But it is a question of its ability to reject some of its obsessions, which have led to negative results in recent years and especially over the past seven months.

Many of the reforms that Greece must implement now Bulgaria has implemented to be able to join the European Union. However, although it has better macroeconomic indicators today, Bulgarians still lead a harder life than Greeks do. Do you agree with this statement and how would you explain it?

I think it is wrong to compare the level of living in Bulgaria with that in Greece or the level of living in Greece with that in Germany. We are talking about processes that have led to economic growth over the course of hundreds of years.

What we have to compare is the situation in Bulgaria today with the situation there before implementing the reforms. I think we all agree with the view that Bulgaria has achieved much progress. Reforms alone are not enough. They are a necessary but not sufficient condition for economic development. Other factors contribute to achieving it as well. But the fact that today Bulgaria has significant macroeconomic stability, a small debt and small deficit is very positive. These things, however, would not have been achieved without the implementation of reforms.

Or to say the same thing in another way: if the European Union had obliged Greece to implement reforms when Bulgaria was obliged to implement them to join it, it would have been in a much better situation today.

The European Union promises no alignment in the level of living and wages. No agreement envisages this. We live in conditions of a single market and competition where there are winners and losers. But I think that with reforms alone, Bulgaria and Greece, and all the countries of our region can become more competitive and therefore struggle for wealth distribution under better conditions.

Tags: PoliticsDimitris KourkoulasSYRIZA governmentPublic debtReformRefugees and migrantsEuropean Union
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