Nobel laureate Joseph Stiglitz was highly critical of the German policy of austerity in the Eurozone and claimed that “Germany is responsible for the chaos in Greece”, in an interview he gave to German newspaper Tagesspiegel.
According to the economist “the problem has been transferred to the future [and] we must wait to see what will happen after the elections, if there will be a coalition that will be able to break the old system of oligarchs”, before noting that “the troika has so far not helped much in this direction”.
The American economist underlined the need for a write off of the Greek debt, in stressing how “the International Monetary Fund has made clear that Greece cannot service its debt, the country needs a debt haircut. This is a fact regardless of how you name it: haircut, restructuring or anything else”.
Furthermore, Stiglitz estimated that unless some of the targets set by Greece’s creditors are not changed, then the rate of recession will be much higher than expected. The economist argued that the primary surplus target for 2018 cannot be more than 1%, when the creditors have demanded a 3.5% surplus.
“What kills Greece is not only the lack of efficiency in the public sector and the private sector. When the banking system in Greece is so destroyed, it cannot do much for small and medium sized enterprises, and Greece is a country of small and medium-sized enterprises. We must find a way to restart their financing” he concluded.
