Galery

2

1

Professor Gikas Hardouvelis graduates his bachelors and masters degree in the Harvard University in USA and his doctors’ degree he receives in another big American university – the Californian Berkley. From 2000 until 2004 he is the director of the economic office of the former Prime Minister Kostas Simitis. “I am an optimistic for the entrance of Bulgaria in the euro zone”, says Gikas Hardouvelis in an interview with Maria S. Topalova

- About ten days ago the Bloomberg agency published the forecasts of two investment banks – Citygroup and Morgan Stanley that most affected by the Greek economic crisis will be Bulgaria and Romania where the Greek banks hold about 30 per cent of the local market. The two investment banks believe that the Greek banks will decrease even more the granting of credits for those two countries. Do you agree with these forecasts?

-In Greece the public sector is having problems, not the private one. It is exactly on the contrary. Exactly because the public sector is not effective, the private one is more flexible and productive. The international economic crisis surprised the European banks in a very unstable condition while the Greek banks were very profitable and with a lot of liquid capital. This means that the crisis showed the advantages of the Greek banks. Now because the crisis stroke Greece everybody started fearing for the Greek banks. However they are very stable, they have no problems and are even thinking of investing even more abroad.

    - Eurobank is in Bulgaria for over 10 years. What is your experience?

- We have a subsidiary bank in Bulgaria which is independent and is subject to the legislation and the regulations of the Bulgarian government. It is not directly lined to our group. Our group starts from Switzerland (EFG, European Financial Group) and our bank here in Greece is part of it. The bank is making careful movements, wishes to grant credits, however it does not want to grant credits to speculators or to invest in real estate. This is normal and everybody does it. We are a healthy bank in Bulgaria, we progress very well we believe in the future of the country, we believe that the country will manage to enter the euro zone like also managed to enter in the European Union. There is a consensus within the entire Bulgarian society regardless of whether you speak to the government or with the central bank or with private business people, they are all aware of the economic policy of the country which purpose is to enter in the euro zone. No matter who is at the top of the government – the right centrists or the left centrists. This is also happening in other countries like Serbia and Romania for example. The European Union and the euro zone are an anchor for the politics of these countries. The economic policy has to govern and lead the politics of intrigues and this is something very positive. I am an optimist.

    - According to you what are the chances of Bulgaria to enter in the euro zone?

- This is a political decision. Bulgaria has to do its job and it has to do it in this difficult international environment… Because in a difficult international environment everybody could find an argument in order to tell you: “Wait for a while longer”. Your Prime Minister has to lead a very active foreign policy and to speak with each government in Europe by clarifying the specifics of the Bulgarian reality. All the people who have some power in Bulgaria as well as the central bank have a clear vision of the economic policy which the country has to follow and I am an optimist for the final result.

    - What is your forecast for the progress of the euro zone in 2010?
    
    - Definitely in 2010 the euro zone will not register a great economic growth. There will be a positive growth it will exit the recession it already entered in 2009, however the growth will be by about 1 per cent or 1,5 per cent to the maximum. In America the growth will be much faster. In the euro zone not as much. The fact that the euro is losing its value in regards to the dollar is helpful this means that the crisis has one good consequence and in this way the European export could improve. It helps us and it helps Bulgaria and all the countries. Usually the rates of growth in the euro zone are not very big. They are about 2 – 2,5 – 3 percent, not like in America or in Asia. I see a stronger rehabilitation in 2011.

    - If now we look more generally at the Greek economy how do you rate the efforts of the government to put an order in the taxation system, to make reforms in the public insurance and to stop the waste in the public sector?