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Padoa-Schioppa:The long and winding road of Greek economy
Posted by keeptalkinggreece in Economy
Ten to fifteen years of austerity lie ahead of Greece , Tommaso Padoa-Schioppa predicted for the Greek economy stressing that rebuilding trust in the Greek economy will be a long process that will last further than 2013.
Tommaso Padoa-Schioppa is banker, economist, Italy’s former Minister for Economy and Finance (2006-2008) and former member of executive board of European central Bank, currently functions as advisor to Greek Prime Minister George Papandreou.
Speaking at a conference of the Hellenic-American Chamber of Commerce, Padoa-Schioppa estimated that 10 to 15 years will be required in order to complete the reconstruction of the Greek economy, as long as it needed to revive the German economy.
Five risks for the Greek economy
Referring to the progress in the realization of the IMF/EU/ECB Memorandum he acknowledged that important steps have been achieved resulting in improving the position of the country.
However he distinguished five risks associated first of all with the possibility of fatigue on the side of government’s effort and the society after the barrage of measures announced with the signing of the Memorandum.
* The first risk is that the danger of complacency is always lurking within such a large effort .
* The second risk is related to the speed of promoting structural changes, which lower than the one agreed.
However he acknowledged the difficulties that exist in some areas such as the fiscal area as the structural changes and reforms involve the entire administrative machinery of the state.
* The third risk concerns the implementation of commitments undertaken by the Greek government for the foreseeable future, recognizing that these interventions are more difficult than the ones have been realized in the first months of Memorandum.
* The fourth risk is related to the “impatience” shown by the markets. Although he admitted that “several times, markets make mistakes in estimating”. However he said that both analysts and markets are pushing for “faster” results, results that are not always feasible to appear at such a short time span.
* The fifth risk has to do with the adverse external environment as the major economies are in recession because of the restrictive fiscal measures applied.
Speaking generally about the crisis, Padoa-Schioppa said it is not purely Greek, but it is crisis throughout Europe. He added that Greece is part of a broader European effort to restore confidence.
Article in Greek in newsportal news247
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