- It is not a question of aid. I am one of those who believe that Greece should be pressed to take all necessary measures that will show the world that something has changed and that steps in the right direction are made. Anyway, already there is a decision of the European Council, which says that the eurozone countries are prepared to do everything necessary to stabilize the Euro. And this is an informal assurance that if the need comes, if the markets are no longer looking for Greek bonds, there will be intervention in some way. This is an approach which we call tough love. When you are interested in someone and you care for his best then you are trying to improve him by being very strict. Well, something similar is happening now and in the European Union. It wants to pressure us so that the Greek government will take very strict measures to ensure, without any doubt, the objectives of the Stability Program. And that is accepted by the government. Now, whether there will be some tangible financial assistance from the eurozone, it is difficult to predict.
- How do you see the development of the eurozone? Will there be other countries in the situation of Greece?
- There are other countries in the eurozone, which have large deficits. Of course, they have less debt than Greece, but they have fewer opportunities from Greece to reduce their deficits. In recent years we have not we made any savings, on the contrary - we had bigger and bigger deficits. Now there are huge opportunities to reduced costs, since in recent years we crossed the border with the appointment of public employees and with the increase of their salaries each year. I.e. we have great opportunities to save money, greater than in other countries. Spain has a deficit of more than 11.5%, which is a result of the great economic crisis. The construction industry in the country has literally crashed and unemployment reached over 20 per cent. With high unemployment you have extremely high costs benefit payments. This is something that cannot be changed in one day. There should be economic growth. Therefore, Spain will have a very difficult time reducing its deficit. Well, if the markets understand that, they may strike there as well.
- Do you have any projections for the inflation and economic growth in the eurozone and the behavior of the Euro against the Dollar and the British pound?
- This year in the eurozone we will see growth of about 1%. There are projections of about 0,5 per cent and for 1,5 percent growth. It will be a difficult year, because many of the measures to boost public finances, which the Government undertook in 2009, have been exhausted. Monetary policy is gradually entering. There will not be many events in 2010, but rather at the end of 2010 and early 2011 we may witness increase in interest rates. And also at the end of 2010 we will see more and coordinated action to reduce budget deficits in some eurozone countries. We will have growth, we are not going to witness a negative growth of -0.4 per cent, which we experienced in 2009, but I do not believe it is going to be more than 1%. Inflation is not a problem. Having 1%-1,5% inflation is no big deal at a time when economic activity is very dull. The rate of the Euro against the Dollar will be determined on whether the U.S. economy will recover faster than Europe one. The Dollar can strengthen if the recovery of the U.S. economy is quicker and the monetary policy begins to raise interest rates much earlier than in Europe.
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