Slovak News Back to the news
SaS: Loan to Greece Will Help Banks and Not Country
Thursday 06 May 2010 Zoom in | Print page
Bratislava, May 6 (TASR) - The financial assistance to Greece is a bad solution for the indebted country, as well as for the whole eurozone, said chairman of non-parliamentary party Freedom and Solidarity (SaS) Richard Sulik on Thursday, adding that the loan will only help the banking sector, which has lent so much money to Greece at such high rates.
"This system of loans gives us the impression that we're the winners, as eurozone-member states will borrow financial means with interest reaching 2.5-3 percent on average and these resources will be provided to the Greeks for (interest of) 4 percent. But this is an optical illusion. In fact, there's a question as to when and even whether the provided loan will be repaid by Greece," said SaS teamleader for finance and the financial market Jozef Kollar at a press conference.
According to Kollar, the loan will only rescue commercial banks that earned a great deal on Greek bonds in the past.
Sulik stressed that Greece was given emergency credit in 1985 to resolve its financial problems and promised to save. "Immediately after they were given the money, they forgot about the austerity measures," he added.
Sulik claims that a good solution would only concern Greece itself and the commercial banks. "If banks were lending money to Greece expensively at 10 percent (interest), there's no other solution but to announce state bankruptcy. Hence, Greece should register for the Paris Club like Russia did in the past. A moratorium on repayment is negotiated in the first phase, followed by (negotiations on) partial forgiveness of the debt," said Kollar.
Sulik warned that Slovakia is going down the same path as Greece, but at an even faster rate. "Our estimate is that Slovakia won't end up with a deficit lower than 7 percent this year. The economy is growing again this year, but our deficit is growing as well. So, it's obvious that the crisis is not the only cause. It's also caused by the Government's overspending and unprecedented stealing," he stressed.
All rights reserved. Any publishing or further dissemination of press releases and photographs from TASR's resources without TASR's prior written approval constitutes a violation of the Copyrights Act.
