Dallara reviews the 2010s
The inexperience of the SYRIZA government (2015-2019) forced Greece to undergo another five tough years, noted Charles Dallara, the former Institute of International Finance head who in 2012 led negotiations on a major haircut on Greece’s private-held debt, known as the private sector involvement (PSI).
In an interview with Kathimerini, Dallara, who was in Athens for the presentation of his book “Euroshock,” explained that the PSI saved the eurozone, corrected long-standing mistakes of the private sector and prevented an Italian debt crisis. He recounted the tug-of-war between then Prime Minister George Papandreou and German Chancellor Angela Merkel over the IMF’s participation in the bailout program, and the Fund’s demands during the PSI negotiations that nearly stopped them.
Dallara referred to the wrath of then Finance Minister Evangelos Venizelos after Papandreou’s referendum initiative, and to then US President Barack Obama’s desire to help in the Greek crisis that met German and French opposition.
He said Papandreou’s successor, Lucas Papademos, succeeded since he hadn’t served in the thorny political scene, and stressed that SYRIZA’s inexperience cost Greece five extra years of painful adjustment.
