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“If the IMF and the European Commission had not undertaken to Greece, its budget deficit would exceed 20 per cent and gross domestic product would fall by 10 percent,” said the Eurogroup’s chief negotiator with Greece Servas Derose in an interview for the Sunday edition of Kathimerini. The famous Belgian economic expert recognized that he has warned Brussels for the first time in May 2009 that the Greek budget deficit will exceed 10 per cent and then his words have caused shock, but not ... reaction. 

Derose warns that the 2010 recession in Greece will be deeper than had been supposed at the beginning and will reach to -4 per cent. Gross domestic product will continue to fall at least in the first half of 2011, then the first signs of recovery will follow. According to him Greek economic crisis is due to the reluctance of previous governments to make the necessary structural reforms and to the poor job of public administration in the country.

Servas Derose explained why he insisted on reducing the salaries of civil servants and private employees – the first in order to reduce costs in the public sector, and latter to reduce the prices of goods and services that Greece offers thus making its economy more competitive on the world markets. “Reduction of wages would not be necessary if they had made reforms in education, labor market, public administration, infrastructure and energy markets,” he admits. On the inflation in Greece, he stated that one of the challenges facing the European Commission is to deal with cartels that dominate the Greek market.

The Belgian economist states he understands the sacrifices the Greeks are currently making, but encourages them to make them because the application of the three-year memorandum to him means “a revolution not only in the Greek economy, but also in the Greek society.” “If we succeed to implement the memorandum to the last letter, it would mean to cope with the Greek budget deficit and external debt in short and medium term, to provide the country some healthy public finances. But the most important goal is to liberate the enormous possibilities of the Greek economy for greater productivity and higher economic growth and hence for higher employment,” said Servas Derose in an interview for Kathimerini. At the same time he admits it is not in his power to predict when this exactly will happen.

The expert urged the Greek opposition to be less opportunistic and has a better view of the national interest, rather than the one of the party.