A leading Greek economist says it is impossible that the EU will allow Greece to default on its debt.
Professor Panagiotis Giannakopoulos, from the University of Seattle Athens campus says Greece’s economic survival, as well as its status as a member of the eurozone, is guaranteed.
“No European politicians have the nerve or the guts to go back to the old days before the single European currency,” he said.
“I believe we have to compromise but I think we will survive with the euro, even if it is hard.”
He went on to explain that Greece’s economic situation is not as bad as some other Eurozone member states, which should aid its recovery.
He said the UK is at risk of buckling under the weight of a 165 billion euro public deficit, while Spain’s private sector debt continues to grow at a rapid rate.
“The private sector in Greece doesn’t owe any money, it’s only the public sector that is in bad debt,” Professor Giannakopoulos said.
“Spain is the opposite. They don’t have such large amounts of public deficits in the central government – I think it’s only 60 billion euros. On the other hand they have about 350 billion euros that the private sector has in debts to the bank system.”
In a wide-ranging interview with Neos Kosmos, Professor Giannakopoulos expressed concern that while the austerity measures will help to dig Greece out of the economic doldrums, they will also take a toll on the Greek way of life.
“Those measures they take away income from the families in a dramatic way, so I think social and cultural life in Greece in ten years time will not look like the one we are used to and still have today, so I’m a bit afraid if that.”
Despite this, he is confident that Greece will take the steps required to ensure its recovery, though there will be more trying times ahead.
“You need a lot of discipline when you have this kind of austerity measures. You have to have a very disciplined economy with a contractionary fiscal budget,” he said.
“If you take these sorts of measures as prescribed by the European Central Bank and the International Monetary Fund, one third of the income of the Greek family is going to disappear, so it will be very difficult for the common Greek citizen to survive. It is a very difficult period and of course there will be unrest.”
Professor Giannakopoulos will give a lecture on the Greek financial crisis at 8pm on Tuesday 18th May at the GOCMV building, 188 Lonsdale St, Melbourne. Entry is free.
