FRANKFURT (MNI) – “Broader systemic issues” within the Eurozone are
the main obstacle to Greece’s access to financial markets next year,
former Greek Finance Minister George Papaconstantinou said in the
Financial Times.

“It is clear that the [Greek] programme design was flawed and had
to be subsequently corrected: the interest rate was set too high and the
repayment period too short,” Papaconstantinou, now the minister for
environment, energy and climate chance, said in a commentary published
in Tuesday’s edition of the business daily.

“But the reason Greece will not be able to access markets in 2012
and needs a new loan (coupled with privatisation receipts and a private
sector voluntary rollover of maturing bonds) has less to do with flaws
in the programme’s design or implementation and more to do with broader
systemic Eurozone issues, EU electoral calendars, as well as with the
reality of debt numbers,” he added.

Papaconstantinou projected a primary surplus for Greece next year,
which should reach 6% of GDP by 2014. The minister also expects the
economy to return to growth next year, as reforms are “providing a
supply shock to the economy”.

“Yet, ultimately, debt sustainability is in the eye of the
beholder,” Papaconstantinou said, adding that markets “have a short
memory.”

“They are voting today for debt restructuring, just as they were
happy in 2009 to be lending to Greece at just 100 points over the Bund
when the fiscal problems were patently there for all to see,” the
minister said.

“They were wrong then, and they are wrong now,” he claimed. “This
is why the strategy of buying time, or ‘kicking the can down the road’
as some uncharitably put it, is actually the only rational one today.”

“It gives Greece the time to prove it can finish the job it
started,” he continued. “And it gives Europe time to think through its
options and tools to help countries in a crisis in a way that is
realistic – by making the debt burden sustainable without the drama that
a restructuring or a default would bring to the Eurozone.”

— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —

[TOPICS: M$X$$$,MGX$$$,M$$CR$,MFX$$$]