“A second haircut for the Greek economy is out of the question”

“A second haircut for the Greek economy is out of the question”


Review by Christos T. Panagopoulos –

President of the European Commission, José Manuel Barroso, expressed on Thursday his disagreement over scenarios talking about a new “haircut” on the Greek debt, by sending a clear message to Athens to accelerate its efforts to implement some of the reforms needed.

In an interview he gave to the German daily “Bild”, Barroso cleared that “a haircut is not something which is supported by the Commission”, estimating that “this would only bring new disorder in the Eurozone and would acute insecurity to investors”.

“A second haircut would have major consequences even for the rest of the Eurozone countries, which are nowadays financially supporting Greece. Taxpayers in those countries would not accept it”, he stressed.

Answering to a question whether he loses his confidence over the Greek government due to the delays observed in the field of structural reforms, the head of the Commission said that “for the last years the Greek citizens have been doing incredibly many things. Their sacrifices are enormous”.

However, he noted that several reforms yet to be implemented need to proceed. “This is where Athens must present results. But the most important is that through bailout programs for Greece as well as for the other debt-stricken countries, the whole Eurozone has apparently managed to stabilize”, Barroso added.

But he estimated that the Eurozone has not overcome the danger yet. “We have reasons to be optimistic that will succeed. (…) It’s like mountaineering; even when you return, you might fall”, Barroso claimed.

The head of the EU Commission sees a bigger danger, not in economic but in politic level: “When countries become politically unstable, when there is no government with ability to manoeuver, then investors leave. This is how, for example, Italy was led, through an unstable government, in the crisis, which is now overcoming”, concluded Barroso in his interview.

Source: Deutsche Welle