A debt haircut is inevitable because Greece will never be able to pay its debt, former Die Linke leader and German Finance Minister Oskar Lafontaine said in an interview with ANA-MPA.
“The issue of debt haircut should be negotiated with the creditors,” he underlined.
“This haircut should be properly made so that the economy grows and Greece can serve its debt,” he explained and added: “However, only a haircut will not be enough.”
Lafontaine estimated that the austerity policy has failed and Europe risks to collapse mainly because of the Monetary Union’s wrong planning.
The former Finance Minister said that Greece needs to return to the existing European Monetary System (EMS) adding that Denmark also participates in the EMS.
The European Monetary System allows revaluations and devaluations and obliges the European Central Bank to intervene if there is a high depreciation or revaluation of a currency. “I am convinced that this way the Greek economy would slowly recover.“
The full interview of Oskar Lafontaine is available at ANA-MPA website.
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