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Out On Bail, Papantoniou Glad For Euro

Yannos Papantoniou
Yannos Papantoniou

Yannos Papantoniou, a former Greek finance minister who propelled the country into the euro 11 years ago – and who is now being investigated over a secret Swiss bank account – said he’s not sorry Greece switched to a currency that skyrocketed prices and put the country under the oversight of lenders who had to come to the rescue when the economy collapsed.
In an article published in Foreign Affairs magazine Papantoniou takes credit for giving Greece the euro and said it should keep it, despite fears over the last three years that the crisis would cause the country to default, which he said would be “disastrous for both the country and Europe as a whole”.
He wrote: “I steered my country into the common currency club… and to this day, I believe it was the right decision.” Greece got the euro in 2002 and prices immediately soared, making some fruits and vegetables, for example cost 5-10 times more than previously. Greeks, with easy credit, then went on spending binges and racked up huge debt at the same time the goverment did.
Papantoniou, who served as finance minister from 1994 to 2001, said that, “The euro was a good idea for Greece when the country decided to join, and it can still be saved.”
These are troubling times for him personally though. Papantoniou and his wife Stavroula Kourakou were released on bail this month after defending themselves before a magistrate on charges of failing to declare their assets on required declarations of wealth.
Papantoniou was accused of not notifying tax authorities in 2008 about a $2.2 million bank account belonging to his wife. Despite being a financial expert, he said he didn’t know he had an account or was on a list of 2,062 Greeks with $1.95 billion in secret deposits in the Geneva, Switzerland branch of HSBC, data that still hasn’t been checked by Greece for possible tax cheats.
In his commentary, Papantoniou said that joining the Eurozone helped stabilize the country’s economy and encouraged investments, although it destabilized the economy and drove away investors.
He argued that the fiscal crisis, caused largely by alternating administrations of his PASOK Socialists and their rival New Democracy Conservatives packing public payrolls with hundreds of thousands of needless workers in return for votes, had nothing to do with the euro.
He wrote that Greece’s problems did not arise during the accession process but midway through the last decade, “when large imbalances emerged between eurozone countries”.
The crisis led former Prime Minister George Papandreou, the former PASOK leader, to impose harsh austerity measures in return for a first bailout of $152 billion from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).
Current PASOK leader Evangelos Venizelos, a coalition partner in the government led by Prime Minister Antonis Samaras, the New Democracy chief, has backed the pay cuts, tax hikes and slashed pensions – wrongly, according to Papantoniou. He said the measures are ““inadequate and even self-defeating”.
He explained that, “The debt-ridden countries have been forced to stomach exceptionally harsh austerity measures, including tax increases and cuts in public-sector salaries and pensions,” referring to other Eurozone countries also struggling with financial problems, as well as Greece.
As for Greece’s future Eurozone, he said that, “There is reason to be pessimistic”, but stressed that a potential exit would not only be disastrous for the country, but also undercut the integrity of the financial bloc.

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