Piketi: There is a huge hypocrisy towards Greece

Piketi: There is a huge hypocrisy towards Greece

Athens, April 3, 2015/ Independent Balkan News Agency

By Spiros Sideris

“There is a huge hypocrisy towards Greece and this is dramatic”, says in an interview with the Belgian newspaper L ‘Écho the famous French economist and author of “The Capital in the 21st Century” (which has sold 1.5 million copies) Thomas Piketty (photo).

Responding to the question whether the reforms already proposed by Greece is moving in the right direction, Piketty gives the following answer:

“I think that first of all there is a huge hypocrisy towards Greece and this is dramatic. Obviously the Greek tax system needs to be improved. But, on the other hand, the French and German banks are very happy to receive deposits of wealthy Greeks, without giving details on Greek tax authorities. And you want, then, Greece on its own to impose a fair tax on the rich Greek taxpayers? The Greek tax system should be improved towards the taxation of large property, and here a European solution is required. On the other hand, there are still many people in Europe who like the idea of ​​pushing Greece out of the Eurozone. And this is extremely serious”.

When asked why the exit of Greece from the euro is a cause for concern, the French economist says:

“I think that it will be the beginning of the final defeat of Europe. This is absolutely certain. The question in each subsequent election, Portugal, Spain or Belgium, will be whether the particular country must leave the Eurozone or not”.

Then he was asked to comment on the opinion of the Minister of Economy of Belgium Johan Van Overtveldt that a «Grexit» will not be a disaster, with Thomas Piketty indicating:

“Listen, with apprentice sorcerers, as in this case, we are not on a good track … Europe is one of our most valuable assets, and if we start to say that a country, which represents less than 2% of the GDP of Eurozone is not able to resolve the problem within the euro and should be “expelled”, then what would happen if similar risks are presented for Portugal, Belgium, Italy or France? Whenever these countries will have elections, markets will seek their exit. And we will have a huge speculation about interest rates in each country. In this way, we will create an expelling machine for everyone”.

Continuing Mr. Piketi says Greece must certainly sort its finances and to proceed with reforms. He noted, however, that “the idea that we can reduce a public debt of around 90% of the GDP-or 175% as in Greece and 107% as in Belgium with zero inflation and with almost zero growth, only with the accumulation of surpluses of 2, 3 or 4% of the GDP every year, this is ridiculous”, “because if you look at math, it would take tens of years” and added: “The irony of the situation is that we had already previously much worse debt crises than this: In 1945 the public debt of France and Germany reached 200% of the GDP. Did they pay it off just like that, only with surpluses? Of course not. Otherwise we would be still there. There was restructuring and deletion. And that is what has allowed many European countries to invest in development and infrastructure”.

“But here there is a kind of historical amnesia of our European leaders, especially in Germany, which is very annoying for a country for which the issue of historical memory is essential. I insist on this: that our amnesia will cost us dearly”, Thomas Piketty concludes.