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Maria S. Topalova

Greek PM Georgios Papandreou supported the idea of issuing European securities according to the principle of government securities, which will be offered to financial markets, with the proceeds of their sales will aid form the European Fund for the maintaining stability and its objective will be to help countries in crisis. At a conference, organized by Economist magazine, Papandreou admitted that it is much easier for him to support the idea for the issue of European Securities as Chairman of the Socialist International, rather than as a Greek Prime Minister. "At the moment Greece is pressed to the wall. If we speak about European securities, it will be interpreted as a weakness," he added. 

The idea for the issuance of European Securities was proposed by Nobel laureate Professor Joseph Stiglitz, who is also economic advisor to Georgios Papandreou. According to him the fact that the European Union does not have a fund for maintaining stability is a mistake. Finance Minister George Papakonstantinou openly agreed with him and said that the Eurozone is not perfect. "The Eurozone is based on strict fiscal and monetary principles and this is its biggest flaw," he said at conference. 

However Papakonstantinou admitted that the European Union has tools with which it helps the troubled Greek economy. Currently, the only investments coming to Greece are from the program ESPA, on whose funds the Greek government is relying a lot. Another channel for inflow of investments at low interest is the European Investment Bank. "Unfortunately there is no fund for collective assumption of responsibility in a crisis like the Greek one," concluded Papakonstantinou according to who the crisis in Greece should be the most important lesson for the European Union. 

At the forum Georgios Papandreou developed his theory about the powerful attack by speculators and hedge funds against Greece and the Eurozone as a whole. According to him behind these funds are backed up by powerful capital and a small country like Greece can hardly oppose."Precisely the conservative governments increased deficits and debts, as it happened in Greece and in the United States. Created were conditions for the extraction of profits at the expense of the poorest. So now the fate of entire nations like ours is left in the hands of international rating agencies," said the Greek Prime Minister. 

According to Finance Minister George Papakonstantinou the task of the Greek government is very complicated also due to the volatile international financial environment, in which the country was forced to act. "We are witnessing the total loss of confidence in us. Our EU partners we do not believe the statistics we present. Markets do not believe us that we will be able to conduct the reforms we have stated. We need to restore that trust, not for the markets or for the European Union, but for ourselves," promised Papakonstantinou. 

In conclusion, Professor Joseph Stiglitz concluded that the question facing the world today is not whether capitalism is good or not. There is no alternative to the market economy. Every successful economy was a market one. But according to Nobel laureate in it there is place for the state as well. "What happened in the U.S. is not capitalism, but ersatz-capitalism - there we privatized profits and nationalized bank losses. The core of capitalism is the procedure of bankruptcy. When you cannot pay your bills you bankrupt. That's exactly what did not happen in the U.S.—in other words there we broke the rules of capitalism and this is very, very dangerous," said the professor.