Yannis Stournaras insists Greece is over the worst but says Europe needs to show beleaguered country more solidarity
Greece's finance minister Yannis Stournaras is a long-distance swimmer who fixates on goals. As monitors from the EU, ECB and IMF continued on Monday to scour the debt-choked nation's books – and the president of Cyprus beseeched Athens for help in propping up the island's banks – the macro-economist was in upbeat mood dismissing talk of rows and ructions, preferring instead to focus on the target ahead.
"It's like a marathon, the last kilometres are the most difficult because you are so tired," said Stournaras, insisting that Greece is close to overcoming its worst crisis in modern times.
There may still be protests – even violence at times – but the country that only last summer had been almost written off as a euro member state was finally about to turn the corner.
"To a large extent Greece is out of the woods. No one talks about Grexit now – even economists who advocated Grexit have apologised for it," the Oxford-educated technocrat, who relishes nothing more than a three-hour sea-race against himself, told the Guardian in an interview.
"As far as fiscal adjustment is concerned we have covered two thirds of the goal. As far as competitiveness is concerned we have covered three quarters of the distance to the goal," he enthused. "Greece has paid a very high price in terms of austerity … But I think the worse is behind us and we can look at the future with hope."
Stournaras, who took over the post of finance minister when prime minister Antonis Samaras' tripartite coalition government assumed power last June, accepts he is an optimist by nature. Seated behind his impeccably neat desk, the Greek parliament shimmering on the other side of Syntagma Square in the early spring sun, the finance minister is confident that the euro zone has also learned by its mistakes.
Cyprus, whose own finances are hanging by a thread thanks to the losses it sustained when Greece restructured its debt, will get by just as Athens has, even if it is hard. "Of course Cyprus poses a systemic threat," he says of the impact of a possible default by Nicosia on the 17-member eurozone. "And being so close [economically and politically to the Greek Cypriots] we have to be careful and vigilant. But now the eurozone is experienced in handling crises, I am not afraid of having a problem with Cyprus."
For a man who measures his words carefully, Stournaras unsurprisingly refuses to be drawn on whether Greece would ever allow Nicosia to participate in its own €50bn bank recapitalisation scheme.
In his first official trip abroad on Monday, the island's newly elected president, Nicos Anastasiades, is believed to have urged Athens to hand over €2bn in aid as part of the bid to help rescue Nicosia. After fighting so long and hard to win the bailout funds in the first place it is difficult to imagine austerity-whipped Greece giving up any money easily. "Its very delicate," says Stournaras.
But amid all the talk of bank depositors on the island being forced to accept losses as the price of a bailout, he quickly adds that whatever the solution, "we should avoid [one] that might destabilise Cyprus."
Stournaras does not deny that with much of Athens' two-year fiscal consolidation programme frontloaded in terms of cuts and tax increases, this year may well be the most trying yet in Greece's gargantuan struggle to defeat a debt load projected to reach a staggering 185% of GDP by the end of 2013. He recognises that the very notion of a "haircut" might also be unfashionable not least in pre-electoral Berlin.
But, at some point, action will need to be taken to slay the monster that lies at the core of the country's economic woes.
"What I expect from Europe is more solidarity. We need more investment, more financing from the European Investment Bank," he avers. "And I want to remind the euro group [of single currency finance ministers] of their decision in November 2012 that when Greece enters into a primary surplus our peers will take all the necessary action to bring down interest rates on the loans so that we are able to bring down our debt level."
Reducing interest rates, he argues, will be less painful and, by implication, less politically costly for creditors who have already earmarked an unprecedented €240bn in rescue loans for the country that triggered the euro zone crisis, revealing the extent of its deficit in late 2009.
"We started with a primary deficit of 10% per of GDP and budget deficit of 15.9% and loss of competitiveness as a result of entering the euro of more than 30%," he says reeling off the figures.
"Greek society has shown a great deal of fortitude and patience … we have implemented structural reforms. We have opened up more than 50 closed professions."
There are many, however, who do not share Stournaras' optimism and even more who find it difficult to believe that Samaras' fragile conservative-lead coalition will survive beyond the summer.
Given record rates of unemployment – at 26.7% the highest in the EU – and a recession that began in 2007 and has begun to bear all the hallmarks of a great depression, analysts say it is a wonder that the uneasy alliance of conservatives, social democrats and ex-Eurocommunists has survived at all.
As the spring sets in and the rains subside, there are fears that protestors may return to the streets as they did on Sunday evening once again clashing with riot police beneath Stournaras' office in Syntagma Square.
The government's inability to rake in revenues as a result of persistent tax avoidance has added to concerns that new measures will have to be taken to make up for budget shortfalls. The spectre of mass public sector layoffs also hangs like the sword of Damocles.
With the country at the edge of bankruptcy, Stournaras, a social democrat, says ideological differences no longer matter. He cannot say when Greece will return to international capital markets, the pre-eminent sign of the crisis' denouement. Nor can he say when tax evasion will be dealt with, once and for all, although academic studies have shown conclusively that it is the rich who partake of it most.
What he can say with certainty, however, is that Greece will be lead out of its crisis by a new generation that is "well-educated, empowered, emotionally intelligent".
"I constantly tell the prime minister that the future lies in our hands … we just need to overturn the tradition of lack of meritocracy," he insists.
Greece's future will also depend on Europe. "It will depend on [its] architecture," he says. "We need a more federal Europe, closer unity, more cohesion. The bailouts of Greece, Portugal and Ireland are an example of the important changes to that architecture."
 |
| READ THE ORIGINAL POST AT www.guardian.co.uk |
