Samaras: Eurozone decisions insufficient without growth

The decisions for Greece's debt taken by Eurozone heads of state and government were a "positive step" but not enough, main opposition New Democracy leader Antonis Samaras said in Athens on Friday. He stressed that the main priority had to be restoring economic growth, without which the bailout package would only be prolonging the "slow death of an economy in recession".
He also termed Thursday's decision as an "admission that the policies of the Memorandum and Medium-Term Fiscal Policy adopted until now had failed utterly". This was why new measures and new loans were needed and why the date when Greece could once more borrow on the markets was being pushed back, he added.
"A decision to improve the terms of lending is not enough if the deep recession is not overcome and we do not enter into recovery and growth," he said.
According to Samaras, the likelihood of a selective default by Greece in the near future was now extremely high and this would act as a stigma for the Greek economy and raise issues about supporting liquidity.
"This also seems to be covered by the agreement but we don't know how long it will last nor how the Greek economy will react, nor how international markets will react in the other countries of [Europe's] periphery," he added.
While welcoming the boost to liquidity for banks and insurance funds, Samaras noted that there was not a similar measure to ensure liquidity for the real economy. He also pointed out that the European Financial Stability Facility (EFSF), while now enabled to buy bonds on the secondary market, would need significantly higher funds at its disposal in order to do this and that no provision for such an increase had been made.
In further criticism of the new bailout plan, Samaras said that there were several points that were very unclear and, especially for Greece, inadequate:
"If foresees a small reduction of the overall debt of about 26 billion euro. Before the Memorandum, Greece's debt was 127 percent of GDP. With the first Memorandum, this was seen
rising to 149 percent of GDP before it started to fall off. Afterward, this target was revised upward many times. Before the Medium-Term Fiscal Strategy it had reached 200 percent of GDP. With the Medium-Term strategy it ended up at 160 percent. Now it returns to 149 percent of GDP, roughly. Here we simply have a confession and correction of the mistake of the Memorandum," he said.
The main opposition leader also expressed concern over the collateral guarantees demanded for the new loans and repeated that this was not acceptable to ND, "as it had not been up until now for Mr. Papandreou".
He further questioned the government's claim that the new package had stopped any further growth in Greece's debt, stressing that the growth of the debt was a result of the deficits generated each year.
"Until yesterday, for the first half of this year the deficit should have fallen 4 percent and it had risen 28 percent. As long as the deficit does not fall, the debt will grow," he emphasised, predicting that this would continue to happen as long as the economic policies of the Memorandum and Medium-Term strategy remained and caused a recession.
"For us, the priority today is the same as yesterday: a change of policy to kickstart the economy. The battle for the sustainability of Greece's debt will be judged mainly within Greece from the battle for growth. And this primarily requires a change of policy," he concluded.

Εγγραφείτε στο newsletter μας

Ενημερωθείτε πρώτοι για τα τελευταία νέα, αποκλειστικά ρεπορταζ και ειδήσεις απο όλο τον κόσμο