Thomsen: The program for Greece was wrong

 

Thomsen also hinted against the Eurozone, saying that since the beginning, the IMF had advocated a longer adjustment period for Greece.

 

The prospect of recovery is not an easy task, admitted the head of the Greek program, stating that the prime minister has worked hard to put the program on track.

 

He estimated that Greece is expected to move on to a primary surplus in 2013, but noted there are still risks and challenges, especially in the face of the structural reforms. The key to returning to growth in the mid-term is profession deregulation.

 

Regarding competitiveness, he said the labour cost has been adjusted, but the decline in wages has not been followed by a decline in prices, which is a problem.

 

Thomsen explained that the Greek program relies heavily on cuts in pensions, arguing that it was necessary because the increase in state pensions was the main reason for the huge budget deficit in Greece. To avoid further cuts in wages and pensions, it is crucial for Samaras’ government to deal with tax evasion and reduce the public sector, as he said.

 

He added that the two-year extension granted to Greece is correct but requires additional financial assistance, and that finally, a two-year extension to the adjustment program was achieved until 2016, when Greece is expected to reach a primary surplus of 4.5% of its GDP.

 

He admitted that the situation in Greece is still very difficult, even today, as social and political balances are fragile, state debt is too high and the competitiveness of its economy is very weak.