Greece 'Urgently Needs a Compromise'

Novinite Insider » OPINIONS | June 18, 2015, Thursday // 19:26
Bulgaria: Greece 'Urgently Needs a Compromise' Photo by EPA/BGNES

If Greece is hit by a crisis now, the European citizens will pay much more than if no reforms are reached, a Bulgarian economist believes.

In a discussion hosted by the Bulgarian National Television on Thursday, Aleksandar Tomov, an economics professor, opined that Greece should be urgently and swiftly offered a compromise, and its debt should be restructured to allow for a bigger timeframe and put an end to the present situation that is leading the country "to the gallows."

"We hold no interest in the bankruptcy of a country like Greece. Any decision like that one will have serious repercussions on the region and on Bulgaria."

Apart from the consequences for Greece itself, such as a forced bank holiday in the country, inability to pay salaries and pensions and a de-facto prolonging of the crisis, problems are looming for the EU as well if such a scenario unfolds. 

"A very negative example will be set [if that occurs]... and the euro will fall further," Tomov said.

He pointed to compromise as the top priority, "something that we are becoming aware of in the last months. Greece is merely unable to pay."

Joachim Kalamaris, a Greek economist living in Bulgaria, had to disagree.

"The problem lies within the onset of the funding process, the so-called "reforms". In his words Athens is able to collect the EUR 7 B due by the end of June, and the question is whether "the Troika [of international lenders], and not necessarily just Europe, wants to end this financial mockery it is committing on a country which, until 10 years ago, had a wonderful economy prior to joining the Eurozone."

Kalamaris downplayed warnings by Greece's central bank head of Wednesday that the country is heading for a Grexit, explaining he was making the announcement to help international lenders, since his institutions was virtually now in charge of implementing decisions taken at the International Monetary Fund (IMF).

"The problem [also] comes from political and economic corruption," the Greek-born economist underlined, adding its total volume in a few years' time amounted to EUR 200 B (against the backdrop of EUR 320 B in international debt). He even pointed to foreign arms manufacturers from Germany and France which were paid hefty sums to deliver equipment but never supplied it to the country and never contributed with VAT to the system.

"Greece went too far with spending and taking on loans," Prof Tomov said for his part, adding Bulgaria had not so far taken the same path but risked doing so by giving the green light to possible billions-worth loans.

Latest comments came as a Eurogroup meeting kicked off in Luxembourg to discuss measures in the face of a possible Greek exit from the euro.

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Tags: Joachim Kalamaris, Aleksandar Tomov, greece, debt, IMF, Eurozone, troika

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