Greek MEP Warns of “Catastrophic” Effects of Grexit

In an e-mail interview with the Tasnim News Agency, Rodi Kratsa-Tsagaropoulou, a member of the European Parliament, voiced her fierce opposition to the idea of Grexit.

What follows is her answers to questions about the much-discussed possible exit of Athens from the eurozone:

Tasnim: Do you see the exit of Greece from the eurozone a correct decision?

Kratsa: There is no chance that it is a proper decision, either for Greece, or for the Euro-zone or for the credibility of the European Union in the eyes of its citizens and the rest of the world. First of all, there will be catastrophic effects for Greece as well as unforeseen and incomputable economic effects for the rest of Europe and world.

We all have to take these dangers very seriously. Parallel to this, the Euro-zone would have lost its character and dynamic as a unity of States with determination, common goals and definite prospects. It would be slipping backwards for the European unification. I should remind you that the European Union passed crises, made in many cases small steps instead of big ones, but never turned back. All the big and small nations, as well as the European institutions, must rise to our responsibilities today to avoid a possible accident.

Tasnim: For several years, Athens have been adopting policies to get rid of a financial crisis, but they apparently have failed. Why do you think those measure have not worked?

Kratsa: We need to clarify something. The measures that we mention were taken due to the fact that Greece had to make quick fiscal adjustments because it had a high deficit, about 12% in 2009 and it could not borrow in permissible levels from the financial markets. Our European partners and the IMF lent financial resources to Greece and imposed a road map and a “memorandum” of demands for changes. These processed the recession, unemployment and the social crisis, but it delivered the fiscal goods.

We brought the deficit to 3% in 2014 and we managed for the first time to have a surplus. The predictions for 2015 from international institutions were for around 2%, which created the possibility of gradually confronting the issue of unemployment and the borrowing from international markets.

Parallel to this, Greece, in order to become competitive as it is imposed by the participation in the Euro-zone and international competition in general, had to make reforms and many changes. It had started to attract foreign and local investors, both minor and major.

During this crucial period, the opposition party at that time, SYRIZA and others, forced early parliamentary elections and brought on a political crisis since they blocked the election for the President of the Republic by the parliament. They won the parliamentary elections through promises which they could not implement, ignoring or altering the European reality and rules as well as the obligations of the creditors. What happened next you are aware of.

The course could not be completed towards the exit from the “memorandum” and its strict program. It is unfortunate because the Greek people suffered to reach this point and now we have to start over again with even harsher measures.

Tasnim: Why do so many people have the impression that the solution to the economic problems of the country is withdrawal from the eurozone?

Kratsa: This is due to the fact that the Greek adoption of the program took a very long time, it had multi-faceted economic, social and political effects in Greece and tired the public opinion of the member-states of the Euro-zone. Also, today the Euro-zone has a general feeling of security due to the fact that they have developed mechanisms for protecting against a possible Grexit. For these reasons, Greece must not make any mistakes and give arguments for the activation of the plans for Grexit.

In any case, the majority of the Greek people are in favor of remaining in the Euro-zone, taking into account the importance that it has for security and steady growth. I hope that the government respects this and gives a true fight.

Tasnim: What are your proposals for addressing the crisis in Greece?

Kratsa: The Greek crisis must be solved for the good of Greece, the Greek citizens, the EU and world economy. Greece is a country with great developmental possibilities and a crucial geopolitical location, in a sensitive area with many challenges. Its stability therefore is valuable for everyone.

First of all, we must stabilize our place in the Euro-zone, to remove every idea and possibility of Grexit, to complete the ambitious program of reforms, encourage entrepreneurship and big direct investments. We must convince our lending partners and international investors of our determination and commitment to change, to create trust therefore we can claim better aid through resources from investments and of course the reduction of the public debt, which is very high and constitutes a barrier towards reconstruction.

We all must take our responsibilities in this course, both the Greek and the European side. New Democracy, as the majority opposition has already shown its support in parliament on the new agreement of the government with the lenders, the European institutions and the IMF. The initiatives, the greater responsibility and the completion, of course, the government has as well as the parties that support it.