Speaking to reporters within the framework of a conference organised by KPMG, the noted UK-based economist said Greece will not avoid bankruptcy if it did not promote structural reforms along with privatisations, and stressed the privatisations programme alone cannot led to a decline in the country’s borrowing cost.
The Cyprus-born professor underlined the need to proceed with a large shrinking of the public sector in Greece. The Greek state must not maintain almost any participation in public sector enterprises and urged the government to sell all state-owned enterprises with the exception of enterprises related with defence and social welfare.
Pissarides noted that taxes are currently at high levels, but stressed it was not the right period to proceed with moves to lower tax rates.
He also said he was "puzzled" by the Greek state's failure to collect taxes.
Commenting on a memorandum signed between Greek authorities and the EC-ECB-IMF troika, he said this was not the time to go back and renegotiate it.
“We must take the new support offered and after we implement all necessary measures then we could possibly negotiate some kind of a new memorandum,” Pissarides said.
He estimated that unemployment would continue rising for the next two years, while he noted that early elections would not help the country and opposed the idea of using technocrats in governments. The professor also said he was against a restructuring the Greek debt and noted that Europe reacted with a delay to the Greek problem saying the debt crisis could have large implications in the Eurozone.