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Moscovici: The crisis had Greeks suffer, not the austerity

EU Finance Commissioner Pierre Moscovici has described as “socially brutal” the austerity policy implemented in Greece during the bailout agreements. However, he blamed the economic crisis for the austerity and not the other way around. “It was not the austerity and politics of the troika that made the people suffered, it was the crisis that had to be rationalized at some point.”

Greece had been forced to take austerity measures because there was “make-up on its fiscal figures,”  and its economy was not sustainable in the euro area, he added.

“The country could not survive with a labor market that was totally unrealistic. It could not survive with a pension system that cost 5% of GDP more than that of anyone else. It could not survive with a public debt that did not stop growing,” he pointed out.

He reiterated that bailout reforms must continue to be implemented and pointed out that Greece’s public debt “remains very high”.

Moscovici said all these things during an interview with state-run news agency amna.

Among others, he described as “most dramatic moments” that he lived through in 2012 and 2015 – when Greece on the verge of exiting the euro area.

Moscovici emphasized that Greece was no longer the “poor relation” of the European Union or the “sick man of Europe” but a “country that is fully regaining its sovereignty and its credibility.”

PS No, Moscovici did not make any reference as to why European and Eurozone institutions tolerated for so long Greece’s “make-up on its fiscal figures,” as he argued. Denying own responsibilities and hypocrisy are the Ao & O of EU policies.

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6 comments

  1. When someone comes away from Greece and visits/stays in another eu country one realises how wrong things are in Greece.

    So last week I was in Greece (Loutraki), now I am in Spain. The difference is absolutely incredible. Banks that do not rip off their customers, fiscal arrangements that are correct & legitimate. Fabric of society is correct, fabric of the country is correct, fabric of the infrastructure is correct..

    Love Greece, hate what it is today. Its beauty & the beast.

    I am pro Europe….but what the EU have done to Greece is a humanitarian crime. Not that Greeks have not been responsible for their own demise (Moscovici actually does try to state this…..the systematic institution corruption & fraud are still too obvious & apparently acceptable)

    I look at Greece as a failed state.

    The cost of living is impossibility expensive, go look on Lifdl’s website. Müesli in Spain 1.55, Greece 2.25, car fuel in Spain 50c’s cheaper than Greece. Coffee some 75% cheaper in Spain etc……

    So the poorest in society actually proportional wise pay the most…..go figure. Crazy economics.

    If tourism cools in Greece its finished. But Greece has chosen a route of exploration for hydrocarbons. One accident…end of tourism. Income stream gone. As the world serks to withdraw itself from oil….Greece rushes into exploitation for oil. Its madness.

    All for a NONE repayable, make believe, man made debt. For the children of the children.

    The solution…only if Greeks had courage. Exit the Euro, devalue and rebuild. The rise of Greece would be rapid & dramatic. But…..sorry Greeks have lost their dignity…….their soul. The recent announcement by the greedy Greek banks confirms this conclusion. Oh yes, the greedy greedy Greek banks. (Are they now representative of the new Greece?)

    Greece is dead…. long live Greece!

    • You are right to complain about the high cost of living relative to average wages, but this is a direct consequence of the decisions of the Troika to force Greece to collect high taxes for repayment of its debt to the eurozone. It is no solution to exit the eurozone (which legally is not possible, anyway, without exiting the EU) because the debt remains, and effectively increases with a weaker currency like the drachma (which would have to be created, and would be very weak).

      The only solution is for the hypocritical Germans to allow debt forgiveness, as was done for them after their atrocities in world war two. Instead of accepting the fact that some debts can never be repaid, because they are out of reach, the Germans continue with their arrogant nonsense about morality and (this typical Germanic garbage) “moral hazard” for the eurozone in the future.

      As for the Greek banks, I can assure you that British banks are far worse. Their costs are a disgrace, and make the Greek banks look efficient and reasonable (!)

    • I agree. The EU and ECB are malignant tumors eating away at Greece, Italy, etc. When the EU finally collapses Greece will find itself inexactly the same position it unfortunately and incorrectly tried to avoid in 2010. Getting out at that time could have saved a lot of suffering. May Brexit start the liberation of the countries of the EU.

      • Because of Brexit, I decided not to expand my business into the UK. I am constantly getting calls from UK firms that want to do business with me, and I don’t respond anymore. I sense the urgency and desperation in their voices.

        I don’t think you guys really thought this through. You will be the posterchild of why you don’t leave the EU in a hard manner. It’s worrying to see such a traditionally organized country experiencing a political paralysis.

        Greece is one of the largest beneficiaries of EU funds. Not something that Tsippy overlooked in 2015.

    • I have been living in Greece for 9 years now. Even started a business. Prior to that I was born and raised in the US. Thus, I can compare having done the same things in both countries – interaction with courts, government departments, taxes, etc…

      The corruption and incompetence in Greece is outrageous. From my perspective, the post Junta generation basically destroyed their children and grandchildren’s futures. Papandreoism was the name of the game for both political parties and if any politician wanted to reform Greece, they were shown the door. The people sanctioned this system with their votes ever since the 1980s.

      It is true, Every nation has the government it deserves.

      As for Greece leaving the EU and going the way of the drachma – that is laughable. Greece had no choice but to drop the steadily inflating/dying drachma and take on EU low interest denominated debt to finance its exploding entitlements for another few years before the inevitable happened. Furthermore, its trade deficit and very low foreign direct investment would have made a return to the drachma a re-enactment of the hyperinflationary Zimbabwe episode.

      It’s easy to blame the EU, but Tsippy wanted high taxes and agreed to an outrageous surplus as a trade off to keep the unions and civil service happy while bleeding the private sector.

      The only way Greece will come out of this mess is when the private sector, which now is forced to pay its share of taxes, realizes that they were never part of the promised socialist utopia. They were the socialist utopia’s pack mules all along. Second class citizens to the pensioners and civil servants.

    • Well said. Greece should never have been allowed to join the EU in the first place.
      It should exit the EU and begin again for the sake of all Greeks and a solid foundation for its children.