originally posted at Athens News
A VETERAN of the first left-right coalition government in 1989-1990, Yiannis Dragasakis is also the only leading member of the radical left Syriza party with firsthand experience at the helm of the finance ministry; a position he is bound to hold again 22 years on if his party wins the June 17 polls.
As a moderate and thoughtful MP with a deep understanding of Greek public finances, Dragasakis is also well versed in European affairs and knows how to handle the tough Eurogroup negotiations in which he is likely to be embroiled as a finance minister determined to keep his country in the eurozone, but not at any cost to the Greek people.
Athens News: How do you respond to reports from Italy that Berlin is considering the option of “sacrificing Greece with a disorderly exit from the euro” in order to set an example for remaining eurozone members?
Yiannis Dragasakis: These are dangerous, irresponsible and unacceptable actions on the part of both those who make such plans and those who repeat them in public. What I read behind such scenarios is a sort of fascist logic that calls for killing somebody in order to keep somebody else alive. I, therefore, refuse to take such rumours seriously.
Is it correct to say that a Syriza government would refrain from any unilateral act of abrogation of the memorandum of understanding and the loan agreement with the country’s EU-IMF creditors?
What we have made clear in our election platform and in the letter [Syriza leader] Alexis Tsipras sent to top eurozone officials last month, is that we want the memorandum policies to be replaced with a programme for the rehabilitation of Greek society, the reconstruction of the economy and fair fiscal consolidation. For two reasons: firstly, because the memorandum has been voted down by the electorate, thus depriving it of political legitimacy; and, secondly, as an economic programme, the memorandum has been catastrophic and cannot continue. But the transition from one programme to another will be the result of planning, consultation and negotiations by the new government. It is self-evident that Greece’s relationship with the European Union is not an external relationship but a multifaceted one of structural interdependence between our country, EU institutions and member-states. Consequently, under no circumstances can we imagine a resolution of problems arising from conflictive procedures instead of consensual agreements.
What if there’s a negative EU reaction to the results of the elections, prompting the troika to halt the disbursement of bailout funds which could accelerate the collapse of the local economy and banking sector? How would you react to such moves?
I can understand your question because Greece is not only experiencing an economic downturn but is trapped in a catastrophic spiral, in the fifth year of a recession, which adds up to a GDP loss of nearly 20 percent that puts us in uncharted territory, even in comparison to the Great Depression of 1929 or to the disorderly default of Argentina 10 years ago. Nobody in their right mind would suggest that this situation be allowed to continue unabated. That’s exactly what we are saying in our public statements and said during our visits to Berlin and Paris last month. If we are part of any government after the elections, this government won’t carry out any measure that would exacerbate the depression. Of course, we have to take into account the possibility of a negative response from our euro partners. But we also insist that the present situation in the eurozone is one in which everybody in Europe loses, whereas we want to turn that into a win-win situation for all. I would, therefore, be surprised to face a stance that seeks to maintain the current impasse or make it even worse by cutting our credit lines. On the other hand, you are right to suggest that we should have suitable contingency plans for any eventuality in order not to be caught unawares. It’s good to have such plans without publicising them too much.
What solution do you propose for such problems?
We have been insisting over the past two to three years that a mechanism for the guarantee of deposits across the EU would be the only way to prevent the sort of slow bank runs experienced nowadays throughout the eurozone periphery. Such an institution, backed by the ECB, would suffice to ensure that there is no reason for EU citizens to panic and move their deposits outside their native country.
Syriza’s programme insists on a sharp distinction between low- and high-income earners when it comes to tax cuts and hikes. Isn’t this creating confusion and fear among various social strata?
Our primary target is to ease the burden on the 35 percent of households whose income hovers around or below the poverty line. This is a political objective that’s independent from how much money we have in public coffers. If we have 1,000 euros, we’ll give 1,000 euros; if we have 500 we shall give 500 – it’s a matter of priority for us. We have to take the homeless off the streets; we have to find practical solutions to pressing problems. It’s also a matter of individual initiative. We can’t expect the state to do everything rapidly. Each of us should take our fate into our own hands.
Would you seek the aid of the European Central Bank and the Bank of Greece to backstop the local banking system in the face of a run on deposits?
Our political position is that we don’t seek unilateral action unless we are provoked. This means that if a situation arises for which we are not responsible, but one which jeopardises our national or social security, the government will not hesitate to take all necessary and feasible measures, even beyond the constraints of formal legitimacy. But this would imply that the other side is in breach of its statutory obligations. After all, financing the Greek banking system through the eurosystem is a paramount obligation of the ECB and national central banks which provide the liquidity necessary for eurozone economies to function properly. It’s not some sort of charity that the ECB grants to eurozone states whenever it so pleases. We shall, therefore, do whatever is necessary to shield the Greek economy from eventualities, which we have no reason to believe are likely to happen. It is also worth noting that the European Union is built on economic principles, like the freedom of capital movements, that may have negative effects for which no institution or counter-measures exist to prevent them.
|Athens News 8/Jun/2012 page 7|