In an interview published on Thursday, former Minister George Alogoskoufis said that former Prime Minister Costas Karamanlis and his government were fully aware of his nation’s dire economic situation, but they did not take any direct steps so they could extend their political survival. “Karamanlis knew, saw the situation and made efforts,” Alogoskoufis was quoted as telling “To Vima” newspaper. “But he was under political pressure. You see, he had a slender majority in Parliament. He simply told me: “leave it for later”.
After the current Socialists swept to power in late 2009, Greece’s finances rapidly collapsed amid revelations of years of wildly inaccurate data reporting, a runaway deficit and public debt. Dizzy interest rates combined with repeated downgrades of the country’s creditworthiness forced Prime Minister George Papandreou to seek an international bailout in May 2010.
The €110 billion ($157 billion) EU and IMF rescue loans are intended to keep Greece solvent until mid-2013. Although the government reasuures that there is no question of restructuring the Greek debt, many analysts expect some kind of eventual debt restructuring. In return for the bailout, the Socialists passed harsh austerity measures, slashing pensions and civil service salaries while raising taxes and retirement ages amid a recession and growing unemployment.
Alogoskoufis, a professor of economics who held the finance portfolio from 2004-2009, said conservatives inherited the country’s finances in bad shape, blaming the Socialists for the current situation.
The Socialists’ austerity package have been met with frequent demonstrations and strikes by everyone from lawyers and doctors to bakers and port workers. Comments, made by Alogoskoufis, came amid the latest Greek strike by journalists against austerity measures.
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