Simitis Says Greece Needs New Debt Cut



Former Greek Prime Minister Costas Simitis.
Former Greek Prime Minister Costas Simitis.

Despite a $134 billion debt write-down last year and new international loans pouring in, Greece’s economy is still in such bad shape that the country needs another debt reduction, former prime minister Costas Simitis said he believes.

In an interview with German newspaper Handelsblatt published on Feb. 9,  Simitis said that since Greek public debt would be at 124 percent of GDP in 2020, another restructuring would be needed.

“A comprehensive solution requires total debt to be at a much lower level, substantially below 100 percent of GDP,” Simitis told the newspaper.

Simitis, the former PASOK Socialist leader whose administration has been blamed for creating some of the conditions that caused Greece’s economy to nearly collapse, said he was also fearful of more social unrest over unrelenting pay cuts, tax hikes and slashed pensions being imposed by the coalition government led by Prime Minister Antonis Samaras.

The Premier is leading an administration that includes partners the Democratic Left and PASOK, now led by former finance minister Evangelos Venizelos, who had imposed 74 percent losses on investors to write down the country’s debt.

That nearly wiped out Greek and Cypriot banks and small bondholders in the Diaspora, some of whom put their savings into helping their homeland only to lose most of their money.