A prominent group of LSE academics have written an open letter urging both sides in the Greek debt crisis crisis to act in a more ‘economically responsible manner’, in order to avoid Greece being forced to leave the Eurozone.
The letter, which is signed by Nobel Prize-winning economist Professor Christopher Pissarides, alongside many other eminent members of LSE faculty, emphasises that the priority for all sides should be to enable the Greek economy to grow sustainably.
“The Eurozone is currently facing its biggest crisis since its creation in 1999. The consequences of Greece leaving the Eurozone are highly uncertain and could very well be detrimental both for Greece and the Eurozone. To avoid Grexit, it is essential that both the creditors and the Greek government act in an economically responsible manner.
The first priority for everybody should be to get the Greek economy on a sustainable growth path. This would benefit the Greeks, reduce the risk of financial turmoil, and maximize the amount of money the Greeks can return to their creditors. If both parties are truthful in saying that they would prefer Greece to remain in the Eurozone, then they need to recognise the need to restore economic growth.”
The signatories go on to argue the Greek government and its creditors need to take the following actions: a relaxation of fiscal austerity, as it is only likely to deepen the current recession; further structural reforms by the Greek government, including on pensions, VAT, anti-corruption and tax compliance; and, finally, reducing uncertainty about Greece’s future with an early agreement to get debt at sustainable levels.
The letter and full list of signatories are available to read here: LSE faculty urge both sides in the Eurozone/Greek drama to find a solution
For further information contact Professor Wouter Den Haan
9 July 2015