Andris Vilks

The new government of Greece and international creditors need to find a solution for Greece’s problems in a specific time-frame, without pushing deadlines. In case the current aid program does not work they will need a backup plan, or Greece’s exit from the Eurozone, believes Latvian Finance Minister Andris Vilks.

«There should also be a «plan B» for the exit option,»- said the minister. He explained: if one country is allowed not to make decisions and exceed deadlines, it adversely affects other countries as well. The problems of Greece make payments to Spain and other countries more expensive. Therefore, the resolution of the Greek issue will help other countries.

He believes the new Greek government will have time to improve the situation, but, if the current aid program does not work, they will either require a new program or leave the monetary union, which is understandable for both Greece and Eurozone.

If there is no result, there should be a solution on how to move forward. You cannot just turn on Standby mode and hope it all goes away on its own, the minister says.

«There should be a specific border to watch out for,»- the minister said, and noted that Latvia, Portugal and Ireland followed all terms of their loan programs.

In the end of July, the minister expressed his opinion in an interview to Latvijas Radio (Latvian Radio), in which he said that people should stop clinging to illusions that Greece will be able to solve its problems on its own while being in the Eurozone.

He said that it is necessary to look for opportunities to «force» Greece to exit the Eurozone. «The sooner – the better,»- he said.

After that interview, Latvian Finance Minister wrote on his Twitter account that, maybe, the new Greek government could improve the situation in a few months’ time, but it needs strict deadlines for its work and cannot afford to wait any longer.

The Greek government continues negotiations about limiting budget expenses by 11.5 billion EUR that is set for 2013-2014. This measure is necessary for the country to receive the payments from the EU and the IMF.

Greece is forced to decrease its budget, all to receive the next payment of 31.5 billion EUR in September. However, further austerity measures could spark a new wave of public discontent among the population.

European Commission President Jose Manuel Barroso admitted in the end of July: to remain in the Eurozone, Greece needs to fulfil its obligations that were promised to international creditors.

Ref: 102.109.109.2850