http://www.bloomberg.com/video/94406891-papandreou-if-spain-falls-europe-falls.html
Papandreou on whether Greece will leave the euro: "Despite the fact that many economist say if you leave the euro, you
will be more competitive, you can devalue, a Greek exit would not only
be bad for Greece, you'd have hyper inflation, 20 percent lowering of
the GDP. Greece has become the precedent, a test case."
On whether Greece is better off in the euro: "Absolutely. Leaving the euro, despite many economists saying you'll
be more competitive and be devalued. I think now is the point where we
have to look at ourselves in the mirror and look at reality and say
this is the point where we have to make this decision, if we don't, I
believe we will have a small window of time over the next few months,
maybe if we have that and even that...before we see a splintering of
the euro. This is a make or break period."
On austerity measures: "We can have some modifications to the program. I would say yes to
fiscal responsibility, which would also include a growth strategy not
only for Greece, but for Europe because Europe is in a wider
recession, many parts of Europe are in a wider recession, but also
types of structural changes we need to become competitive. Now whether
we can stretch out the fiscal adjustment for another year or so will
take a little bit of pain out."
On what will happen to Europe if Spain falls: "We have reached the limit of patching things up. We have to make
major decisions to create confidence in the market. Will we as
politicians make decisions in time to calm the markets before they go
haywire and create problems for Spain or any other part of Europe,
that is the challenge and we have been behind the curve most of the
last two years. I hope we have come to the realization that we can't
be behind the curve this time."
On how long the Greek government has before it runs out of money: "I think we have a few weeks and that's why it would be imperative
that we first of all have a government and second we take necessary
measures and show we are credible, we have signed up to this
agreement, we may want some modifications, but we want to show we are
credible when we sign as a government as Greeks with our partners.
This is a make-or-break period."
On Europe's crisis: "In Europe we let things linger...we have to move in to for example a
banking union, with a common insurance for a credit, a fund for recap
of banks and restructuring banks, we have to move into fiscal union
for monitoring fiscal responsibility of each country, we have to move
into economic union for more tax harmonization, a social union where
we should have a common policy on employment as far as benefits are
concerned. For example, I've been an advocate of European voucher
where a young unemployed person can take it from Greece and go to
Germany somewhere else to any school or training center and to
eventually employment. We need a more democratic Europe, too. This has
to be a citizens project not just a project of economic or political
elite."
On how severe capital flight is from Greek banks: "That's been one of the problems, that combined with the banking
system not only in Greece but in Europe has been somewhat worried over
the last three four years to lend out - worried about their accounts
to hold on to what they have has not been conducive to growth. It's
getting worse."
On whether Germany is standing in the way: "I wouldn't say Germany is standing in the way. I think Germany is
right now at a point where it is doing well, feeling quite confident,
its economy is booming, it went through ten years of change."
On whether Alexis Tsipras is dangerous: "I would take his words with a grain of salt and would say that what
he would do if he's part of a coalition or even if he is number one
party, we would have to see once he is in government. My hope would be
that whoever is in government acts responsibly, honors a very
difficult negotiation we had over last two years where we came out
with the biggest bailout program in history, the biggest hair cut also
in mankind's history with a tough program of adjustment."
On whether the personal costs were worth it to serve Greece: "I think it's worth it. I believe in politics we are not permanent
fixtures in power, either we serve countries in best of ways and that
could be a personal cost or I would not want to be in politics, I'd be
on a Greek island enjoying myself. I felt this is what I had to do
for my country."
On whether he's transferring his own money out of Greek banks: "No I'm not. I'm voting for Greece, not that I have a lot of money, anyway."
