"Greece was not the only problem in the eurozone" the former Prime Minister George Papandreou said yesterday in Brussels, where he spoke at a conference of the known CEPS on the issue "Does Europe Matter?"
Asked to comment on the internal situation in Greece, in particular whether the country could withstand another political crisis and if it has time for another election cycle, he replied: "Electoral cycles will continue to exist and populism cannot always win, if we courageously defend what we believe". Moreover, in response to a question by Greek journalists on the sidelines of the CEPS, as to whether PASOK should withdraw confidence from the government, in response to his statement that the resignation of Baltakos from the post of general secretary of the government is not enough, Papandreou declined to answer and merely stated the following: "All I want is to help. I have no personal ambition. I want to see Greece succeed".
Asked if what he said applies for Greece, Papandreou responded affirmatively. On regard of the former Prime Minister's speech at the conference of CEPS, it was initially focused on the fact that Europe, despite the crisis, has become a "peace project" until today. Papandreou stressed that Europe needs to move to another model and deal with the globalized economy, saying that the continent can be an example of global governance. As he said, the objective is to make Europe a model of humanization of globalization; otherwise it will result in a situation where globalization will make Europe inhuman.
Talking about the Greek debt crisis, but also about the entire eurozone, Papandreou said that Greece is indeed a problem, but not the only problem in the eurozone and that this should be known in the markets. As he said, the problem of Greece and other countries of the South was a systemic problem of the eurozone itself, which, however, Europe does not want to face. "The lack of a collective response to the crisis didn't help confidence in the markets" he mentioned.
Commenting on Greece, he underlined the unprecedented progress achieved by the country in the last four years both financially and structurally. He stressed that despite the large fiscal deficit, Greece has the largest fiscal adjustment ever achieved by a country in such a short time, because it managed to achieve a primary surplus, while being first in the list of OECD structural reforms. However, he added that critical hits were conceded by Greece, such as the loss of 30% per capita GDP and the skyrocketing of unemployment rates.
Papandreou referred to the fears of leaving the eurozone faced by Greece for almost two years, saying that the result was the outflow of funds from Greek banks, something that reduced consumption and private loans, as the reduction in investments due to the climate of insecurity. "No country can survive under such conditions" he said commenting that the EU should have intervened to convince markets that a Greek exit from the euro was possible and to ensure a smooth recovery path the country.
He added that the austerity imposed in the country was not accompanied by the necessary structural reforms. The fiscal adjustment Greece was necessary, but a tax increase while maintaining an unfair and non-transparent tax system hardly addressed the problem. He added that the tax reform should precede any increase in taxes.