PARIS (MNI) – Greece’s second’s bailout program aims to produce
economic growth and jobs, but neither is likely to occur until the
country’s fiscal imbalances are corrected, EU Monetary Affairs
Commissioner Olli Rehn said Tuesday.
Speaking at a hearing in the European Parliament, Rehn said that
Greece’s problems have been caused by years of irresponsible government
policies — marked by a deficit of 16% of GDP in 2009 — and they will
take some time of correct.
“We would not be having this hearing today unless the policies of
successive governments in Greece had not led to unsustainable
macro-economic imbalances, losses in competitiveness and very large
fiscal deficits,” Rehn said.
Rehn said that now that a disorderly default had been avoided,
Greece had an opportunity to cut its debt from than 160% of GDP to 116%
by 2020.
“The unprecedented financial solidarity provided to Greece proves
that there is a strong political commitment by the governments and the
national parliaments of the euro-area to give Greece the time and the
means to repair the damage and heal its economic problems,” he said.
Rehn said, however, that while official lenders would monitor and
support the new bailout program, Greece needed to accelerate its reform
program and improve its competitiveness.
“Challenges remain,” he said. “The current pace of reform and
adjustment are far from sufficient to make Greece’s public finances
sustainable or to close the competitiveness gap. Further efforts are
therefore necessary.”
–Paris newsroom, +33142715540; jduffy@marketnews.com
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