Greece needs massive privatisation: ECB's chief economist
Greece must intensify its reform efforts through a massive privatisation programme, chief economist of the European Central Bank, Juergen Stark, said in remarks published Wednesday.
"Greece has put in place over decades poor economic policies and has lived above its means. A 180 degree U-turn is inevitable and will be painful," Stark told Swiss business weekly Handelszeitung.
After having been granted 110 billion euros ($155 billion) in loans from the European Union and the International Monetary Fund, Athens now needs to make additional efforts to repay its debts, by launching a massive privatisation programme, he added.
"Experts estimate the privatisation potential at up to 300 billion euros. A part of this value must be used to lower the debt level," said Stark, adding that 50 billion euros could already bring down Greece's debt by 20 percentage points.
"Greece is not a bottomless barrel" for aid funds, said Stark.
The chief economist also stressed that the ECB is opposed to any restructuring of Greek debt.
Lengthening the repayment deadline would only increase the size of the debt, warned Stark, noting that a partial default could lead to a meltdown of the banking system as well as Greek economy.
© 2011 AFP