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CEO of EFSF Warns Standard of Living Will Fall for Greece

According to Reuters, Klaus Regling, CEO of the EFSF (i.e. European Financial Stability Facility) said during a discussion organized by the Social Policy Association that the IMF/EU bailout programme may have bore fruits for Ireland and Portugal in terms of buying them more time to pay their debts and stabilize their economy but it is not working for Greece, at least for the time being.
Although he admitted that the Greek Programme has failed to achieve its goals, Mr. Regling insisted that Greece is not in the position of “devaluating its currency or exiting the Monetary Union, so as to aid its plight”. Therefore, it is inevitable for the Greek people to carry the cross of “the painful process of cutting internal spending and driving down wages” as this constitutes the only way out of the crisis.
Mr. Regling continued by adding that Greece will not be ready to re-enter the markets by 2013 and that the Greek people must be ready to accept the fact that their standard of living is bound to decline, while the Greek government insists on pleading for more sacrifices on behalf of its people in order to restore the investors’ confidence and the country’s economic competitiveness.
On the other hand, Mr. Regling has considered Ireland to be a “success story, since the worst is now over” for the country, which has pulled itself out of the crisis with the help of the IMF/EU bailout programme.
What is surprising though, is that the latest IMF’s report on Ireland’s economic status completely negated Mr. Regling’s above-mentioned statement and actually called the Irish government to set its prior aim of earning 2 bn. Euro from privatizations to 5 bn. Euro. This means Ireland must undergo further structural reforms, since the Irish debt will reach 119% of GDP in 2013. All of these are the result of the slow growth rate Ireland showed for the year 2011, which hardly reached 0.4% instead of 0.6% predicted by the IMF analysts.

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