Interview: Greek opposition economist dismisses default, Grexit in run-up to election

A prominent economist of SYRIZA, the Greek left-wing opposition, has dismissed concerns over Greek's default and the Grexit, saying his party "does not want to leave the euro zone in any case."

John Milios, professor of political economy and one of the architects of SYRIZA's economic program, told Xinhua in a recent interview that there is no reason for fear of a Greek bankruptcy and a Greek exit from the euro zone.

In the run-up to Greece's Jan. 25 general elections, SYRIZA leads in opinion polls. However, its plans regarding the resolution of the debt crisis have sparked concern.

The idea of a new debt restructuring and the prospect of a confrontation with the European Union and the International Monetary Fund, which kept the country afloat since 2010, over the terms of the post-bailout era collaboration, worries the country's international creditors, investors and analysts.

"No, we do not expect and we do not want any default," Milios said, adding it would be a blow not only for Greece but also for the euro zone.

In the case of Greece's default and Grexit, the country would have to devaluate its national currency and the European common currency zone would be transformed into a zone of fixed exchange rates and collapse within months, he argued.

"We as a party do not want to leave the euro zone in any case. We belong to the European Left and we work with other progressive forces for a social and democratic Europe," he added.

For Milios and SYRIZA, the Grexit scenario is part of a campaign aimed to frighten the electorate into voting for the conservatives.

"Personally I believe that we are going to have an agreement with our partners on a new basis. I am confident it will happen in less than two months," Milios told Xinhua.

For SYRIZA, the Greek sovereign debt is unsustainable and the problem will remain unresolved as long as the European Central Bank (ECB) does not play the role of a last resort lender and the country is tied up in the austerity trap, Milios said.

He said debt servicing has become an austerity trap which deprives the country of resources which could be used for growth. Pointing to Italy and Spain, Milios noted that this is not only a Greek problem, but a European one.

The economist proposed to restructure the country's sovereign debt.

"There could be solutions without putting the burden on the shoulders of the tax payers of any country if the ECB takes a more active role," he added.

With record high unemployment and poverty rates, dealing with the humanitarian crisis is the top priority in SYRIZA's economic program which is comprised of four main pillars, the Professor said.

The second axis is the restart of the economy by tackling two key problems - the non-performing loans and the arrears to tax authorities and the social security system. Milios suggested a freeze of part of this debt load to allow some breathing space and projects to combat unemployment.

The third axis of the Radical Left Coalition's program is the stabilization of the labor market, Milios said. The party will raise minimum wage to the level it was in 2011, from 586 euros (678.65 U.S. dollars) to 750 euros.

The fourth axis is the introductions of reforms.

Critics reject the party's economic manifesto as unrealistic. Milios responded that SYRIZA has thoroughly calculated the resources on the basis of which the program will be financed. He mentioned a few examples: the battle against tax evasion and funds from the European program for supporting cohesion and development projects.

"We are determined not to create deficits ... We consider it to be a program of salvation of our society and we are not going to disappoint people," Milios said. Endit