‘Greece is most difficult nation in Euro Zone’

| | Updated on: Aug 22, 2012

Greece is the most difficult member-state among the Euro Zone nations, which has a different set of problems in comparison to other debt-ridden states, European Financial Stability Facility (EFSF) Chief Executive Klaus Regling has said.

Terming the issue plaguing Greece as not that of liquidity but that of solvency, he said: “Greece in the end has solvency problem, while all other nations have liquidity problem.’’

He was addressing the first International Institute of Strategic Studies (IISS)-Oberoi lecture here last evening.

“The most difficult state we have is Greece, for several reasons. Greece has the most difficult fundamentals; economic situation was most serious, debt level was the highest, deficit was the highest, loss of competitiveness was the largest. So, they threw up the most difficult situation.”

Regling also blamed the Greek authorities for submitting false economic data at the timing of joining the 17-member monetary union.

“Greece did not give the true economic data at the time of joining the monetary union,” he said.

Talking about the Greek political system, he said: “The political system in Greece is not delivering as in any other country. Ireland, Portugal and Spain had changed their governments in the last 18 months with a mandate to implement reforms and the Opposition is cooperating as well.”

“Greece, in the end, has solvency problem, while all other nations have liquidity problem,” he added.

Calling for stiffer remedies to tackle the Greek crisis, Regling said, “We are putting more than €100 billion for Greece, which is not needed for other countries. So, very special solutions are needed for them...Despite the adjustments Greece has taken in the last two years, there still remain a lot to be done.’’

Many of the 17-member Euro Zone nations are facing a sovereign debt crisis with higher debt to GDP ratio, creating a downward spiral in growth, which is currently affecting the global financial system at large.

Published on March 12, 2018

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