SUGGESTION TO THE EUROPEAN COMMISSION PRESIDENT 2011

SUGGESTION TO THE EUROPEAN COMMISSION PRESIDENT

To:               The Right Honorable European Commission President

From:            Athinarayanan Sanjeevraja

RE:               Greece Crisis

Suggestions.

Good Morning Mr. President. I am writing to express that Greece must continue on the path of austerity. When I wrote to the Greece Finance Minister two weeks back, I recommended that greater reform efforts, above all on the privatization front, voluntary buyback of the Greek bonds, spiced with a partial guarantee from the EFSF, insurance of new bonds covered by premiums to the ESFS. I have been saying till the beginning of the crisis EU should provide security to Greece so that confidence returns to the economy. But EU always failed to do it.

The proposed austerity targets are realistic. For instance, look at the achievement of Estonia, Latvia and Lithuania which experienced GDP contraction of 20% and had  similar levels of unemployment. With strict policies of internal devaluation and fiscal discipline, taxes were increased and public sector wages were cut by around 30% and more so in the private sector where labor is more flexible. Look at the achievement of those countries in 2009 and 2010. Those countries were turnaround from the crisis with strict policy measures. Hence I wrote to the Greece Finance Minister since 2010 a refurbished economic structure is essential to restore growth and competitiveness along with an austerity drive to restore Greece economy on track.

Greece looks to EU for good guidance, I hope that EU will not let the country down. If Greece would defaulted it is not a failure of Greece, It is failure of the EU.

Thank you very much for your kind attention to this issue Mr. President.

Sincerely,

Athinarayanan Sanjeevraja