Return to the drachma would take Greece back decades, says banker

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Mr. Alexis Papachelas is a guest editorial writer to The Business Thinker. He is currently the Executive Editor of the long standing and highly respected daily Greek newspaper “Kathimerini”.

This editorial is also appearing in Kathimerini.

Only fraudsters and opportunists stand to gain from a return of Greece to the drachma, a prominent Greek banker told Kathimerini’s Sunday edition.

“They would be those who expect to buy Greece or parts of it for peanuts; those who have swindled the State and hope to escape punishment through a disaster; those who took out loans and wasted them,” said Apostolos Tamvakakis, managing director of National Bank, Greece’s biggest lender.

Tamvakakis said Greece can avoid default through a concerted effort.

“We are living in conditions of war, which require a national understanding and a rallying of forces. Any other option would take the country many decades back… Unfortunately, we missed many opportunities in the last decades and now that the hour of truth has arrived the changes must be implemented all at once. But it’s the only way to maintain the country’s European orientation. If this orientation changed, the basic foundation on which modern Greece was built would collapse”.

Tamvakakis warned against the belief that Greece’s European partners will save the country regardless, because too much is at stake, saying “our eurozone partners are not bluffing. There is no doubt that they have made mistakes, and indeed, very serious ones… But now there is widespread ‘Hellenic fatigue’ among them and we must take this seriously into account. An increasing number of them believe that Europe can live without us.”

Tamvakakis believes that the Greek economy will restart at some point.

“The issue is when. I hope soon. The implementation of the July 21 agreement and the stabilization of public finances through the creation of primary surpluses in 2012 will create the preconditions for a restart. The markets will begin to trust the country, and the banking system will begin to borrow from the international money markets.”

According to the banker, privatizations, waste and water resources management, deregulation of the energy sector, the energy upgrading of buildings and competitive cultivations are areas of investment activity that could spur the recovery. But, he added, the country also needs a stable tax system and to streamline its wasteful bureaucracy, which breeds corruption.

“Institutions do not work properly in Greece… This is the great obstacle,” said Tamvakakis.

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