Simitis Says Greece Didn't Cause Eurozone Crisis, Blames New Democracy

ATHENS – Former Prime Minister Costas Simitis, during whose reign Greece entered the Eurozone more than a decade ago, has denied that the country was responsible for its economic crisis spreading beyond the borders and threatening to take down the Eurozone of the 17 countries using the euro as a currency. In a commentary published in the British newspaper The Guardian, the former PASOK Socialist leader said that Greece exposed the inherent flaws within the union. “Greece sparked the Eurozone crisis but was not its cause,” Simitis wrote in a joint commentary with Yannis Stournaras, Director of the Foundation for Economic and Industrial Research (IOBE), an Athens-based think tank.
“The cause lies in the fact that the Eurozone is a fully fledged monetary union but an incomplete economic and fiscal union of member states with different structures: the more mature economies of the European north and the less mature ones of the European south,” he wrote in an apparent attempt to deflect blame not just on Greece but for his tenure, during which the country’s debt began to soar, exacerbated by the cost of hosting the 2004 Olympic Games.
The former premier, who served from 1996 to 2004, noted that the Eurozone’s public debt crisis chiefly concerns Greece and Portugal, but said that a broader crisis of the private sector and the banking system has affected many member states. He wrote that that another problem area was “control and supervision by the financial and monetary authorities of the Eurozone.”
Simitis blamed the EU for failing to create “a method of dealing with the inequalities between its developed core and its less developed periphery,” and said that, “It has not worked systematically to truly promote economic growth. If this is not done, there will be more crises’,” he wrote, noting that the only way forward is to introduce additional measures for growth and convergence.
Instead of pushing economic growth, the EU, along with the International Monetary Fund and European Central Bank, which make up the EU-IMF-ECB Troika lending Greece $325 billion in two bailouts to prop up the country’s dead economy, insisted instead on austerity measures that have worsened a deep recession and created 21.8 percent unemployment and led to the closing of more than 111,000 businesses.
Simitis also refuted the claim that Greece entered the Eurozone by falsifying data. “The allegation indicates ignorance, not to say hypocrisy,” he wrote, although the EU’ statistics agency, many EU officials, financial analysts, bank officials have said that was a critical cause. He did not provide any data to dispute their claims other than his.
Simitis and Stournaras, said that there, “is a widespread feeling that the conditions imposed were a punishment intended to teach other countries a lesson. “The recession, initially predicted by the IMF to be -7.5% between 2009 and 2012, is now estimated to have reached -18%, resulting in a failure to meet other targets and generating intense social unrest,” he continued. Simitis said that the country was only allowed to enter the common currency “after exhaustive scrutiny of the Greek economy and respective reports by the European Commission, the European Central Bank and the Economic and Financial Committee,” although those agencies said they didn’t know that Greece had provided phony data.
Simitis insisted that the problem lay not with him nor PASOK, but its bitter rivals, the New Democracy Conservatives, who took power in 2004 and ruled until 2009, when the economic crisis began and after then PASOK leader George Papandreou took power. He also blamed New Democracy, but his reign ended on Nov. 11, 2011 after incessant protests, strikes and riots against the pay cuts, tax hikes and slashed pensions he imposed on orders of the Troika.
Simitis said the fault lay in the way New Democracy reported defense spending. “This change meant recording expenditure upon payment of the deposit, instead of recording it upon delivery, as had been done by the government until then. However, this change had the effect of increasing government deficits prior to 2004 and thus damaged Greece’s reputation.” He said New Democracy made the accounting change “so as to lighten the budgetary burden during its term of office.” New Democracy and PASOK have taken turns blaming each other for the crisis.
He also said that the European Commission had to take a share of the blame as it did not seek the views of the central Bank of Greece or the previous government for its views on the changes in data recording. He also denied that Greece had incompetent political leaders or was living beyond its means, although the Troika has said there is a mountain of evidence proving that all governments, including those led by Simitis, hired hundreds of thousands of needless workers in return for votes, and it was during his tenure that Greece was engulfed in a series of scandals, including involving the Olympic Games costs.
(Sources: Kathimerini, ANA, Athens News)