Interview: Greek economy in turbulence but solutions will be found: expert

A decade after the start of the international financial crisis, the Greek economy is entering the new period of turbulence but solutions will be found, Panagiotis Petrakis, professor in the Department of Economics at the National and Kapodistrian University of Athens, told Xinhua in a recent interview.

The 2009 Greek debt crisis at an extent was a "byproduct" of the global crisis, but also a domestic product. Greece entered the era of globalization with a weak production structure. "After seven years of bailout programs, despite progress made, this shortage is still there. The restructuring of the production basis should be the focus of policymakers to find solutions quickly," the expert said.

According to Petrakis, as well as many officials and economists today, the formula chosen to address the Greek crisis is incomplete. As a result, Greeks face a prolonged economic depression. Fiscal numbers have stabilized and unemployment is being reduced but not quickly enough. "At these rates, Greece needs a decade so that all these jobless people enter the market again and a new production structure is created," Petrakis said.

Political instability in Greece did not help the crisis either, he added.

Were bailout programs the solution? For Petrakis, certainly Greece needed a sort of bailout, but also a haircut from the beginning.

"We need a wiser management and our partners should understand that you cannot miraculously fix everything overnight. People and institutions do not change so easily," he underlined.

"People have matured and are awaiting good and substantial proposals which will give perspective. This story of the constant redistribution of the existent wealth leads to a dead end. We must produce new wealth and I believe we are at this point," he added.

Asked about the prospects of the Greek economy, Petrakis stressed that default and Grexit scenarios are no longer on the table, but accidents happen. A "communication problem" in July when Greece needs to repay debts could lead to such an "accident" but is unlikely.

"Solutions will be found and Greece will move onwards to the next stage of growth," he said.

Despite setbacks, a growth rate of 1 to 1.5 percent of GDP (gross domestic product) in 2017 seems still feasible. Should everything go well, Greek citizens will start feeling the positive change in their personal finances next year, Petrakis added.

"In coming years, there will still be significant fluidity in the region. We need very strong alliances on international level politically to counterbalance our economic weakness," he said. Endit