Can Greece wave goodbye to debt?

World Finance speaks to Richard Murphy, Tax Researcher and Political Economist, about Greece's future after the successful election of Syriza

January 27, 2015
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Transcript

World Finance: Richard; how do you see Greece’s economy developing, now Syriza is in power?
Richard Murphy: Nobody knows what is going to happen in Greece; nobody knows how the European Central Bank and Germany are going to react to the demands that are going to be made of them.

But let’s also put that in context. We do have a new Greek government that is pro-European, and that is pro- staying in the euro. And if the European Central Bank and Germany have any sense, they will exploit that. Because they are facing plenty of opposition throughout Europe: UKIP in the UK, the National Front in France and so on, who are trying to pull out of Europe and the euro. So they really do need to take advantage where they can get it; and Syriza is offering that choice.

I think Europe should be doing everything it can to help Greece

Now, what else are we looking at in Greece? Look: the fundamental problem, and the reason why I think this new government was elected, was not because of the euro, but it was because of a complete and utter desire to create a new style of economy in Greece. To get rid of the corruption, to end the environment where tax evasion was endemic – 27 percent is the best estimate of the amount of tax not paid in that country – and to create a new society where people do pay their way, but at the same time also get the chance to work.

So what do I expect to happen in Greece? I actually expect they will be given the chance to waive some of their debts; some of their interest payments will be waived for some time. And Greece will then get on with building the new structures it needs.

I think Europe should be doing everything it can to help Greece: to build its economy, to collect its taxes, to provide information it needs to do those taxes. To lend its support to reform its tax systems – which are hopelessly bureaucratic, I’ve been there and seen them. And to streamline its civil service procedures to make sure that this is an economy that can move into the 21st century. And deliver for the people of Greece at home; whereas at the moment they’re being forced to move abroad – which they don’t want to do – to get any kind of income for themselves and their families.

So my hope is that Greece will actually move forward very strongly after this; but Germany in particular has got to realise that that is in its best interests; and I’m not sure it’s going to happen as yet.