Syriza economic expert rules out Greek exit from euro zone

Greece’s radical left Syriza party has totally ruled out the possibility of a Greek exit from the euro zone because this would lead to the zone’s breakup followed by new austerity programs, which is precisely what Syriza does not want if it wins the Jan. 25 elections.

“A Greek exit from the euro zone would lead to the collapse of the entire zone. It would go from a single currency system to fixed exchange rates, such as we had in the early 1990s,” said Syriza’s top economic adviser, Yiannis Milios, in an interview with Efe.

Milios stressed that contrary to thinly veiled insinuations of a “hidden agenda” for Syriza made by the conservative government of Prime Minister Antonis Samaras, the party led by Alexis Tsipras does not want to see Greece pull out of the common currency zone.

“We oppose what for most people would be a deterioration in their living standards. Currency depreciation would be like applying an austerity plan,” he says.

Regarding writing off debt, which is high on Syriza’s agenda, Milios said that there are various technical instruments available to make it possible.

Reforming the tax system and the public administration are among the key reforms that Syriza plans to apply if it wins elections.

“We plan, for example, to reduce the number of ministries from 18 to 10 and introduce a public sector driven by criteria of effectiveness,” Milios said.

“While some ministries are not important, there is a need to increase the number of tax inspectors, because the current government has not effectively prosecuted tax evasion,” according to Milios, Professor of Economics at the Technical University of Athens.

Syriza’s economic program, named the “Thessaloniki Agenda” highlights combating the humanitarian crisis, reviving the economy, restoring stability to the labor market and reforming the State.

The program’s cost is estimated at $14 billion.

The first part of the program seeks to provide electricity to 300,000 homes as well as providing food and public transportation for the poor.

Labororiented measures includes restoring the minimum wage of $885.

Syriza’s government would also create an investment bank, which aims to address the problem of accumulated debt of small and mediumsized enterprises, SMEs.

Regarding private debt, the goal is to enable settlement agreements that allow each debtor to repay a maximum of 30% of their income; the balance would be frozen until they are able to pay.

“With these agreements we expect to recover around $24 million over a period seven years, with around $3.8 billion of that total in the first year,” explains Syriza’s chief economist.

According to Milios, around $14 billion could be financed as follows: around $3.8 billion from the recovery of money drained away by tax fraud, another $3.8 billion from repayment of delinquent loans and $3.8 billion from the Greek financial stability fund.