As you are aware, Professor, Europe has
adopted a single currency, the euro. Do you
believe that, under current conditions in the
global economy, the euro zone will manage to
survive?
Yes, I believe it will survive. I think the euro was
good for many countries. There are, of course,
some issues that have to be resolved and I think
that they will be resolved now; we are forced to
do so.
Do you believe that there is a lack of political
will?
There is always a lack of political will when
changes have to be made, because some of
these changes may not be particularly pleasing to
the electorate, and politicians always want to get
re-elected. We are now facing a situation where
changes must, no doubt, be made; otherwise we
won’t be able to move forward. When the euro
was launched, one of the conditions for its exis-
Trade with Greece
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tence was the implementation of structural
changes. However, after 2002 it was obvious that
the economy was growing at rapid rates, the glob-
al economy was booming thanks to China, thanks
to low-cost borrowing etc. Therefore, structural
changes were somehow neglected, almost totally
forgotten. We are now realizing that this issue
must also be dealt with. We must introduce many
institutional changes, both in the government, and
other sectors. However, I believe that, at the end
of the day, the euro had a positive effect on many
countries. Many people say that it was the cause
of many problems we are facing today, but I do
not believe this is true. I believe that if we exam-
ine different countries, we will detect different
problems. For example, the available data for
Greece show that the problem was caused by
government spending in excess of existing capa-
bilities. As individuals, we are aware that if we get
too indebted we must stop getting any new loans,
because we will be leaving beyond our means.
The same stands for governments. If the govern-
ment budget is in deficit for many years in a row,
there is a problem because, obviously, citizens
are consuming more than they produce. The
same applies to the US, the United Kingdom,
even ultra-conservative Germany. In good times
governments are running huge deficits since bor-
rowing is easy — but no one seems to care
because the money is there, so, why bother,
when we can repay later? And when hard times
come, there is not enough room for making the
necessary manoeuvres. And things get ugly. In
my opinion, one of the most important institution-
al changes that must be implemented in the US,
Greece, Germany —in the UK this measure has
already been adopted— is to have someone
overseeing the governments.
So, the infamous Memorandum is something
good for the Greek economy?
I would say that the crisis presents your country
with a historic opportunity. Greece is given the
chance to put its public finances in order, cut
down on red tape and the resulting corruption,
open the so-called “closed” professions, and
stop the generations of the 1970s and the
1980s from depriving future generations of their
resources. I believe that entrepreneurship —
which, I believe, is an excellent means for exit-
ing the crisis not only in Greece, but throughout
Europe— will be strengthened. In the new glob-
al competition environment, entrepreneurship
will become a country’s major comparative
advantage. It will become the most important
means for producing social wealth.
