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Do you think that it ultimately could limit the effect of the recession and boost the growth prospects in the country, which is the main problem?

This could happen if we have a common policy that could provide growth opportunities without threatening the objectives of fiscal consolidation. The Bank of Greece presented in October 2010 a detailed action plan for creating a favourable environment for the Greek enterprises to operate in. And because the internal resources that could be involved in the development of the local market are extremely limited, it is necessary to encourage the imports of foreign direct investment. Today, there are two main options for strengthening growth, which should be used by all means: privatization, which will help reduce the debt and to increase foreign direct investment by using the European Union funds.

Overall, economic development should make the turn from consumption to savings and investments, from the state apparatus to free competition, to export and entrepreneurial will. This also implies restoring of lost competitiveness. The analysis of the Bank of Greece shows that the country's competitiveness has declined by almost 20% in the period 2000-2010. This difference acts today as an additional obstacle to the attempts of restoring our competitiveness. You should remember that the country has two problems: huge imbalances, both in the public sector and external structure in the form of large and persistent deficits.

Some believe that debt restructuring is inevitable anyway. So, it is better to happen now not later to avoid the recession that will deepen with the new measures. What would be the consequences of such an action?

I stated last October that such a move is neither desirable, nor necessary. All those who support the idea that failure is inevitable do not take into account the positive effect of the accelerated recovery program and even the exceeded targets. Such a development would drastically change the negative climate, improve the funding of the country and would attract new funds. Besides improving the environment, the debt dynamics would also change. I am talking about the assets of the Greek government, which exceed 300 billion euros and should be compared with the volume of the foreign debt which reaches 340 billion euros. If some of those assets are put into action as the government made a commitment some time ago, the debt would be reduced rapidly and significantly.

Debt restructuring is not desirable because the consequences would be tragic, both to the society and the economy. Moreover, such an action would create insurmountable obstacles in our relations with the European Union and would threaten the country's EU membership. Therefore, it is extremely important not to resort to debt restructuring to keep the European perspective of Greece.

Banks are accused for not providing cash for the real economy despite the state guarantees thus intensifying the crisis. Is that right?

First, we should clarify that liquidity problems in the economy did not come from the banking sector. Unlike the problems abroad, everything in Greece started from the financial condition of the country, not from the banks. From early 2010 until now, the banks have been facing with a steady decrease in deposits and have been expelled from capital markets due to the downgrading. Without emergency funding from the European system and the public guarantees, banks would be forced to tighten their requirements to their customers, to stop credit refinancing, to limit the measures to facilitate the customers and to reject the applications of new customers, even if they are solvent. The recession would be much deeper than now.

There is a decision to apply stricter laws on capital adequacy of banks. Are the financial institutions at risk if they are unable to meet the requirements and accumulate the necessary capital because of the current situation?

Banks are not at risk. If there is a need of additional capital rising, but the bank has no access to capital markets, it should turn to the Financial Stability Facility, which was established precisely for this reason. This, of course, should not be an excuse to find additional solutions on the market. The current reality of the market is clear as well as the message for the future. So, banks need to adapt to the environment according to the business model, in which they are operating. The changes in the banking sector would contribute to the process of development and support of financial stability.

The policy pursued so far caused serious public responses, and many of the Greek people do not want to hear about the Memorandum today.
 
According to the people, the socio-political system of recent years is mostly responsible for the crisis today. Furthermore, there is no doubt that the problems of this system are the main obstacle to implement policies that would largely prevent the current situation. On the other hand, it should be noted that a large part of the same society adopted and even fed the pathologies of the system by gaining privileges for itself in an ever-growing state structure.

There is no return to this old structure and it would be a big mistake to think things would be back after the "Memorandum leaves". I would like to add that the Memorandum is often perceived as the culprit of the crisis, rather than an inevitable tool for dealing with it. Moreover, it was not explained well that the Memorandum actually reduced the symptoms of the crisis, which would have been much more serious without it.