PARIS (AMNA/O. Tsipira) – French President Francois Hollande, in his first televised interview after his election, told the state channel France 2 on Tuesday that “the Greeks have offered a great deal lately.”
He added that “they have offered a great deal” with the decrease in their purchasing power, or giving up some of their rights. It is a fact that there are Greeks who are very rich who are tax evading and this should not be accepted. I believe, however, that it is not the right way for us to tell the Greeks, ‘consider your state in comparison with the Africans who are living worse than you’. No. Respect is necessary and I am in favour of respect.”
The French president concluded by saying “the Greeks must take a position before their commitments. Be careful, what you shall choose on June 17 will have consequences for you and for us, however we respect you and I respect you and it is evidently a change in comparison with the previous period.”
Greek euro exit to have
huge cost, National Bank says
The risk of Greece leaving the euro currency is no longer a theoretical case study, or a development with zero possibility, but a case of daily discussion and a scenario examined intensively, particularly abroad, National Bank of Greece said on Tuesday.
In a special report on the Greek economy, the country’s largest financial institution stressed that an exit from the euro would lead to a significant decline in the living standards for Greek citizens (with per capita income falling by at least 55 pct in euros), hitting more weaker classes through a significant undervaluing of a new currency (65 pct on nominal terms), a deeper recession (-22 pct on fixed prices), rising unemployment (34 pct of the workforce), while the state would be forced to finance its capital needs creating a vicious inflationary cycle (with an initial inflation of more than 30 pct) which would undermine gradually any competitive advantages from a devaluation.
As a result of difficulties in accessing foreign currency, the country would default on the biggest part of its debt obligations to its borrowers (325 billion euros), with obvious negative effects on bilateral trade and Greek businesses’ transactions abroad. All these consequences would be much more harsh under a scenario of a non-smooth transition to a new currency, National Bank’s analysts said in the report.
The National Bank stressed that the strategy of an economic program accompanying a new borrowing agreement is multi-dimensional and cannot be dealt with a simple answer on pros and cons. The program offers time to implementing reforms, offering an unprecedented level of funding (almost 150 billion euros by now and another 90 billion by 2014) under favourable terms, while a successful completion of a PSI program will cut the state debt by 50 pct of GDP and significantly lowers debt cost servicing for the next decade. At the same time, the program ensures ample liquidity for the domestic banking system through the Eurosystem, the bank said.
Caretaker gov’t finmin meets
U.S. Treasury Department officials
The Greek caretaker government Finance Minister Georgios Zanias on Tuesday met U.S. Under Secretary for the Treasury for International Affairs Lael Brainard and the U.S. Treasury’s Deputy Assistant Secretary for Europe and Eurasia Christopher Smart, who are currently on a visit to Athens.
According to an announcement, the meeting focused on developments in Europe and Greece.
The two U.S. officials also met the heads of Greek political parties, among them PASOK leader Evangelos Venizelos and ND leader Antonis Samaras.