Organisation for Economic Cooperation and Development (OECD) Secretary General Angel Gurria expressed his support on Tuesday for the substantial relief of Greece’s debt.
Gurria was addressing the European Parliament’s Committee on Economic and Monetary Affairs, ahead of the Eurogroup meeting on Thursday.
European Parliament Vice President Dimitris Papadimoulis asked him to comment on the upcoming decision for easing Greek debt following his meetings with the Greek government in Athens a few weeks ago.
He was also asked to comment on the Greek economy in general and give his assessment of the reforms implemented in the country.
Gurria expressed the opinion that a reduction of Greece’s debt should have taken place much sooner and with the support of all countries, such as Germany and France. The finance ministers of that time, however, had decided that the banks holding Greek debt were at risk, Gurria added, and had chosen to protect them by lending Greece the money of European taxpayers to repay its debts to the banks, thus converting a private debt to a public one.
Gurria described this debt as inflexible since it was held by the International Monetary Fund (IMF) and European Stability Mechanism (ESM) and cannot be cut. Referring to the course of the Greek economy, he said that Greece is now in a much better state as it will achieve growth rates of 2 pct this year and 2.3 pct next year, thanks to the recent reforms. These were “painful” reforms, he added, while noting that they had not shaken the government and the Greek people and had succeeded in “reforming” the Greek economy.
Moreover, he underlined that the relief of Greek debt was necessary and although there can be no nominal write-down for political reasons, a number of measures can be taken, such as extending the maturity of loans and reducing interest rates, which will help Greece to stand on its feet.