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The Weekend Neos Kosmos : 4 July 2015
DIGITAL.NEOSKOSMOS.COM GREECE IN CRISIS Sinodinos warns of Grexit cost Senator flags pain of separation from single currency MICHAEL SWEET Liberal heavyweight Arthur Sinodinos has said that tomorrow's referendum offers the Greek people a lifeline to stay in the EU and the single currency, and that "a vote to stay in Europe would be the right way to go". Speaking exclusively to Neos Kosmos, the former assistant treasurer said the argument that Greece would be better off outside the eurozone was unproved. "In the long run they might be better off, but there'll be a lot of pain on the way. There'll be massive depreciation and there'll be capital flight. "There have already been major reductions in real incomes and depreciation is not costless. It means further reductions in real incomes to improve competitiveness. That's what depreciation does," said Mr Sinodinos. The senator added that with the referendum having morphed into whether Greece should be part of the EU and the eurozone, a victory for the NO campaign was a journey into the unknown. "They're better off getting a deal within the EU, get- ting structural adjustment funds to help further structural reforms, and some further measures on debt relief would be good, in the context of a package where credible measures are being “The problem always is, if you kick the can down the road when it comes to fiscal issues, the costs of adjustment mount.” taken by the Greek authorities to put their own house in order." With the IMF being singled out by Greece and its supporters for imposing over-harsh conditions for any new bailout package, asked if Australia had a role to play in the standoff, Mr Sinodinos said that Australia had on occasions made successful representations to the fund in relation to countries receiving IMF loans. "Member countries often use the IMF as the face of strict economic discipline, and that's a role they have to play; a kind of 'good cop, bad cop' situation, and then at the political level, judgements can be made as to how hard to go," said the senator. "In the Asian financial crisis when the IMF came with some pretty stringent package for Indonesia, Australia did intervene when we saw the impact this was having on the ground. That didn't mean throwing over the IMF prescriptions, but it created a smoother adjustment path." Mr Sinodinos added that Treasurer Joe Hockey continued to be briefed on the situation but had indicated publicly that the Australian government was leaving it to European governments to resolve. Reflecting on the five months of negotiations between Greece and the lenders, Mr Sinodinos said Prime Minister Alexis Tsipras' strategy had been to "stare down the EU, and that by staring down the Europeans, they would just buckle, and Greece could get a better deal, but frankly that's not the way the world works". "What's at stake here is whether Greece is making credible steps in order to rectify its situation and put itself on a more sustainable fiscal footing." Despite progress to a primary budget surplus, the Former assistant treasurer Arthur Sinodinos at the G20 conference in Sydney last year. PHOTO: AAP IMAGE/DANIEL MUNOZ. challenge for Greece, says Sinodinos, is its capacity to undertake structural reforms to improve the productivity of its economy. "Greece ultimately has to make a decision that it wants an economy robust enough to sustain a strong social safety net, and has the capacity to raise the revenue it needs to meet its spending, and not be unduly reliant on others. "The problem always is, if you kick the can down the road when it comes to fiscal issues, the costs of adjustment mount, and that's classically the situation that Greece has found itself in - the accumulation of things that have happened over decades." The senator added that the roots of the crisis could be traced back to the dictatorship that ruled Greece between 1969 and 1974. "Ever since the junta collapsed there has been a feeling within the country that we have to maintain liberal democracy, but that can't then drift into a reliance on populist economic policies. We have to be responsible in what we do." Mr Sinodinos said that what was required tomorrow was "a vote to stay in Europe". "That would be the right way to go, and preferably a united voice from the political establishment around the measures that need to be taken. It has gone beyond party politics." Vamvakinou predicts YES victory Victorian MP warns of division at critical time MICHAEL SWEET Federal Member for Calwell Maria Vamvakinou is expecting a majority to vote for the proposals offered by Greece's international creditors in tomorrow's referendum, in defiance of the recommendation by Prime Minister Alexis Tsipras. Just days before leaving for Greece on a working visit, the Victorian Labor MP told Neos Kosmos: "There are powerful conflicting emotions amongst the Greek people and Greek politicians in response to the debt crisis and to the referen- dum; on one hand are those who are consumed by the rallying call 'freedom or death' and ‘ΟΧΙ’ - a fine sentiment when you believe there is nothing more to lose, and then there is growing fury at the government's behaviour, its failure to negotiate a settlement that takes into account the reality of Greece's predicament and its future prospects." While in Athens, Ms Vamvakinou will be a delegate at the 10th General Assembly of the World Hellenic InterParliamentary Association - a body of global parliamentarians of Hellenic heritage. Ms Vamvakinou said she was aware of considerable anger in Greece over Prime Minister Alexis Tsipras' call for the snap referendum "leaving many people questioning what the point of it is”. "The government stands accused of dividing the Greek people at a critical time, when all efforts should be made to uphold a sense of national cohesion and solidarity." The MP said that the dramatic events unfolding "will give Greeks a taste of what the future might hold for them if they exit the euro and isolate themselves from their European partners ... on that basis I anticipate a majority YES vote". Ms Vamvakinou, who departs for Greece next week, said she expected to find a country "in turmoil, a country divided”. "Irrespective of the referendum decision, there will still be a need for Greece to face hard realities; about its debt and its economic future, either in or out of Europe." THE WEEKEND NEOS KOSMOS | SATURDAY 4 JULY 2015 3 Thousands of people who will vote YES in tomorrow’s referendum rally in Syntagma Square, Athens. PHOTO: AAP/NEWZULU/NICOLAS KOUTSOKOSTAS.
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