Former Prime Minister George Papandreou revealed on Friday that he had asked Greece’s lenders to offer the country its first bailout package at a lower interest rate but his request was refused.
Speaking at the Ideas Lab 2014 conference in Brussels, Papandreou said that he had asked for Greece to receive a similar interest rate to that enjoyed by non-eurozone countries such as Latvia and Romania, which received international loans, rather than the initial 5.2 percent Greece was asked to pay.
“They told me it could not be done and that we had to agree to a higher interest rate,” said Papandreou.
“As we were a member of the eurozone we could not devalue our currency, while other countries not in the euro got better interest rates.”
Papandreou added that the constant speculation about Greece’s euro membership and insecurity about its future made implementing structural reforms tougher.
“It mean that it was very difficult to focus on structural reforms. Instead, it was much easier to focus on spending cuts.”