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Monday 19.03.2018 | Name days: Jāzeps

Experts: Greece’s debt cannot be allowed to be written off

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUEven though the European Commission has discussed multiple scenarios for the resolution of the Greek economic crisis, Greece’s possible exit from Eurozone would be economically the worst solution not only for Greece, but for Eurozone as a whole, reports the words of European Commissioner for Euro Valdis Dombrovskis.

Dombrovskis explained in his interview to Sastrēgumstunda programme of LTV – Eurozone member states had decided as far back as 2012 that after the successful completion of the second financial assistance programme Euro Group would come back to re-assessment of Greece’s debts. Even though the aforementioned programme was not successfully finished, Dombrovskis does not exclude the possibility that Eurozone member states could still decide the re-assess Greece’s debts.

Future developments depend on the ability of the Greek government to prepare a convincing programme of reforms, admits the politician.

Riga Stradins University Professor and head of the Foreign Policy Institute Andris Spruds predicts that Greece will have to work in a strict austerity mode for a long time. «Unfortunately, I do not rule out the possibility that the solution that we’re all expecting will turn out to be continued mulling,» – said Spruds.

Governor of the Bank of Latvia Ilmars Rimsevics allows for the possibility that a long period of complicated negotiations will be necessary in order for Greece to recover its economic competitiveness.

When looking at the effect of Greece’s economic crisis on other EU members states, experts unanimously agreed that EU leaders must not allow Greece’s debts to be written off. This will help avoid a domino effect and prevent possible attacks by radical parties on the EU solidarity idea. Nevertheless, a compromise should be sought from both sides.

Rimsevics said that the Greek government should take responsibility for the current situation.

Misleading people with promises of opening banks and delays with measures aimed to provide a solution cost creditors and the Greek people a lot, added Rimsevics. He added that Greece’s inability to overcome the economic crisis in the country is tied to the fact that consolidation measures had been dragged over the course of the past seven years, not in a shorter period of time, like it happened in Latvia.

Economic science Dr. Raita Karnite admits the outcome of the referendum in Greece was to be expected and in a country of democratic rule society does not have the right to condemn any country for such behaviour. Karnite concluded that the largest problem of austerity programme lies in the fact that the things some people do often are blamed on others.

Financial consultant Gundars Kulikovskis adds that the road chosen on this democratic road does provide the possibility for a different country to pay Greece’s debts.

Experts note that on top of the economic crisis in Greece it will be necessary to look at other consequences, including the fact that the country has lost credibility as a cooperation partner.

BNN had previously reported that Eurozone finance ministers have decided to extend the period of time for Greece to come up with new proposals in order to reach an agreement with international creditors.


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