Greece needs to abide by the agreement for reforms as laid out in the new bailout program and the migrant crisis facing the country today should be no for deviation from the “agreed” route, said Marcel Fratzscher, President of The German Institute for Economic Research (DIW Berlin), one of the leading economic research institutions in Germany, during an interview in Deutsche Welle.
Mr. Fratzscher said that Greece is experiencing a severe economic crisis as well as a serious migrant crisis and the country needs to be assisted economically for its efforts to tackle the latter crisis.
However, the President of DIW-Berlin underscored that “it is important that nothing changes with regard to reforms.”
According to Mr. Fratzscher, the problems that Greece has in dealing with the migrant crisis, due primarily to inefficiency and poorly managed institutions, reveal how much the country is in actual need of reforms.
If anything, the migrant crisis facing the country mandates that reforms proceed at an even deeper level, said the President of DIW-Berlin.
Reforms constitute one component of the bailout agreement, said Mr. Fratzscher. The other one if the fiscal condition of the country and the need for additional measures to close the “fiscal gap.”
In this context, Mr. Fratzscher said that further reductions in pension benefits are needed as Greece spends much more for its pension system as a percentage of GDP than the rest of Europe.
“Greece must either reduce pension payments or increase the retirement age,” said Mr. Fratzscher, thereby expressing his support of the current stance of Greece’s international lenders over pension reform.
(Source: DW)
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