VIENNA (MNI) – The new E130 billion bailout deal for Greece struck
by Eurozone finance ministers early Tuesday will have a positive impact,
but Athens must first meet several conditions — and quickly — if the
rescue plan is to see the light of day, European Central Bank Governing
Council member Ewald Nowotny said Friday.

“I think the E130 billion package will have positive effects, but
it has to be noted that there are still a lot of conditions that have to
be fulfilled for it to become effective,” Nowotny, the governor of the
Austrian National Bank, said at a press conference here. “This has been
overlooked in the euphoria.”

He noted that Greece is required to implement “this week” many of
the actions it had promised in its first bailout package but not
completed.

He argued that in addition to budget cutting, Greece must be given
a chance for its economy to grow. “We have to think about active
[growth] measures because it is paralyzing only to think about cuts.
Cuts are a prerequisite but not an aim,” he said.

“The suggestion of a Marshall Plan for Greece, including
growth-supporting measures, is an important plan which should be
considered,” Nowotny added.

The Austrian central bank chief declared that, “Greece is in a very
serious and difficult situation and there are no certainties, but it has
to be given opportunities to come out of this situation.”

He cited Ireland as an example where such opportunities have been
created and taken advantage of. In Greece, there has been only sparse
foreign investment, even though it is a euro area country, Nowotny
noted. He added that structural reforms are needed, and that
organizational infrastructure must be created in order to attract
foreign investors to the country.

“For a foreign investor the risk is comparatively low, even if
Greece were to go back to using the drachma, Nowotny ventured. “Since
these would be export-oriented investments, his revenue would still be
in Euro and he would profit from an immediate devaluation of the
currency.”

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