Economic growth key to to overcome Greek debt crisis ; Bailout money can't solve the fundamental problems in Greece, and the country should focus more on economic growth, a senior member of the main opposition party and a finance professor told Xinhua on Monday.
Under the second EU bailout pact reached last week, debt-ridden Greece will receive a supplementary 109-billion-euro (156.7-billion-U.S. dollar) aid package on top the first EU/International Monetary Fund support package ratified in spring 2010 to tackle the crisis, on easier terms, with the involvement of private holders of Greek bonds.
"The recent decision in Brussels gives more time to Greece to achieve balance in the budget, but we don't think that the strategy that they follow now will be able to do so," said Alternate Head of Economic Policy of Greek main opposition New Democracy Party (ND) Notis Mitarakis.
"We expect more measures to be taken," said Mitarakis, when asked whether the new pact could end the crisis once and for all.
The voluntary involvement of private creditors has triggered a strong reaction of international credit rating agency.
Moody's downgraded the Greek credit rating earlier on Monday to Ca from Caa1, just one notch above "default" level.
Mitarakis believed the austerity and reform so far has resulted in deeper than anticipated recession, rising unemployment and inflation, a vicious circle ending in higher deficit.
"It will take time to see the impact not only for the Greek economy, liquidity in the market for example, but also for the stability and strength of the euro zone in general," said Mitarakis.
Marina Papanastasiou, Research Professor of the Copenhagen Business School and visiting Professor of the American College of Greece, DEREE, said she was not surprised with the downgrade in credit rating.
She said the country should keep calm and focus on growth to tackle the challenge.
"The downgrade is not unexpected. It was something everybody was expecting. The point is how to deal with the next days, weeks or months. I think it should be business as usual in a sense that the Greek economy should focus on what it should do, the government should focus on what they should do," she said.
"The growth path is definitely a path to be followed. It should not be derailed because of the downgrade. This was more or less expected," stressed Papanastasiou, commenting on the Moody's announcement.
Regarding the prospects of Greek economy, following the latest agreement in Brussels, Papanastasiou expressed reservation.
"I would not say I am optimistic. It is in the right direction, but does not resolve the problem. The problem still exists. The Greek debt will not be resolved by this decision. I think there are more decisions to come forward in September and onwards," she told Xinhua, adding that the most important thing for a long-term solution is the emphasis on growth and on attracting foreign direct investment.
In this context of investment, Papanastasiou expressed hope that Greece- China cooperation will flourish.
"We have already seen Chinese investments in Greece and I hope we will see more ... This will establish a long- term good relationship with China," she said.
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