How did your meeting with European Central Bank President Mario Draghi go yesterday?
We talked about the need for liquidity. It is a prerequisite for us to start the much-expected recovery. Without liquidity, you cannot give money to small, medium or large enterprises through the banks, and you cannot allow the system to breathe. And we need a lot of breaths at this point.
Did Draghi tell you anything
We proposed different things to him: The ECB provides liquidity, either through bonds or through the Emergency Liquidity Assistance program. Other countries have access to the markets, whereas Greece does not. Therefore, we have to get liquidity through the ECB.
Did Draghi give you hope?
Draghi, like everyone else, is talking about the need to first see the troika report.
Reportedly, the troika is demanding that your government come up with spending cuts of about 11 billion euros and additional tax revenue. Do you believe you can do this and get your coalition partners to agree? Can you get it passed by Parliament?
Our determination is given. It is 11.7 billion euros in expenditure cuts. All 11.7 billion has to do with making the government smaller and the whole system more efficient. Through cutting more expenditures, the economy becomes weaker because [there is] a GDP decrease. In the last five years, our GDP decreased by 20 percent. If we are to add this additional 11.7 billion, our GDP will decrease by about 25 percent. This is too big to swallow.
But you are going to go through with the reforms?
We have to make sure that we abide by what we have signed because we believe that what they call “Grexit” [a Greek exit from the euro zone] is not an option for us — it would be a catastrophe. In 2013, we are going to have a country in the sixth year of a recession with unemployment above 22 percent and rising.
We are here to fulfill our obligations, to meet our targets. We only insist upon that missing ingredient, which is to bring recovery soon. How? Liquidity.
If you get the troika money all at once, wouldn’t you use it to recapitalize your banks?
Yes, if we get the next tranche, which I hope will be in October, it will recapitalize the banks and provide us with more than $6 billion of arrears, which is money the government owes the private sector. This will enhance liquidity. But the IMF has already estimated that the next three years will find Greece still in a recession. We have to avoid this by any means. We have to make sure that instruments like the ones that can be put forward by the ECB will be activated for Greece.