|Posted by moodhacker on February 9, 2017 at 1:20 PM|
President Donald Trump's reported top choice to become the US ambassador to the European Union has told Greek TV he believes Greece would be better off with the drachma and should have left the eurozone four years ago.
I think it is interesting from the perspective of Greece, why is Greece again on the brink; it seems like a deja vu; will it ever end?
I think this time I would have to say that the odds are higher that Greece itself will break out of the euro.
You said that the other day in an interview with Bloomberg, and it has created quite a stir here. I don’t know how much you know about the Greek economy but it’s definitely not self-sufficient. We have to import even basic things like food in order to survive. How do you see Greece outside the eurozone dealing with that situation?
Well, I think it’s maybe a necessity.
I mean it’s a good question, why? To put the question “why” first, not “how.” I mean, if the [International Monetary Fund] will not participate in a new bailout that does not include substantial debt relief – and that’s what they are saying – then that more or less ensures a collision course with the eurozone creditors.
Now we all know that that primarily pressures Germany, which remains opposed to any such actions, so I think it suggests that Greece might have to sever ties and do Grexit and exit the euro. So, that’s the first fact.
I think if you look at the reality, the situation is basically unfolding in a certain direction. What comes afterwards I think is a very interesting and important question; I think we have to face some facts, I mean the first one is that the harsh austerity programs have been a complete failure. I have traveled to Greece, met lots of Greek people, I have academic friends in Greece and they say that these austerity plans are really deeply hurting the Greek people and that the situation is simply unsustainable.
So you might have to ask the question if what comes next could possibly be worse than what’s happening now.
Referring to a 2012 tweet from Trump suggesting that Greece ditch the euro, the potential EU ambassador, Ted Malloch, told Greek Skai TV's late-night talk show Istories: "I personally think he was right. I would also say that this probably should have been instigated four years ago frankly, and probably it would have been easier or simpler to do."
Malloch also told Greek TV, according to a transcript from the Greek newspaper Kathimerini: "Whether the eurozone survives, I think it's very much a question that is on the agenda. We have had the exit of the UK, there are elections in other European countries, so I think it's something that will be determined over the course of the next year, year and a half."
The anti-eurozone comments are likely to stoke tensions with the EU. Malloch, who is an economist and a businessman, made enemies in Brussels last month when he told the BBC: "I had in a previous career a diplomatic post where I helped bring down the Soviet Union. So maybe there's another union that needs a little taming."
EU politicians have already made the highly unusual move to try to veto Malloch's appointment before he has even been officially confirmed by the president, citing "outrageous malevolence against the values that define this European Union."
Malloch told Istories: "Well, we are not trying to ruffle any feathers — we are simply stating that under the Trump administration there will be some different attitudes towards multilateral institutions and particularly to supranational organizations, so the relationship with the EU will certainly be different."
Malloch's comments come as Greece once again becomes a flashpoint within Europe. The International Monetary Fund warned on Wednesday that Greece's debt burden would become "explosive" in 2030 and called for "significant debt relief" from the EU, something it has called for before.
Malloch backed calls for debt relief saying : "Now we all know that that primarily pressures Germany, which remains opposed to any such actions, so I think it suggests that Greece might have to sever ties and do Grexit and exit the euro."
Greece needs "a haircut [on debt] to the lenders and to the banks in Germany and probably, at least in my perspective, a return to the drachma," he said. Greece gave up the drachma in 2002 as part of its phased entry into the EU from 2000 onward.
Malloch added: "I think this time I would have to say that the odds are higher that Greece itself will break out of the euro."
Malloch said he had not discussed the Greek situation with Trump and said the US would not be willing to step in and help Greece fund its deficit.
On his own appointment, he said: "It's certainly in the works. It's a decision that has been made by the president himself — I have obviously interviewed and talked to the transition team, so we are waiting on the announcement."
The problem... is who will manage that transition, and how, to avoid all the chaos and all the instability.