ECONOMY

Greece’s central bank urges government not to waste past sacrifices [Update]

Greece’s central bank head urged the country’s government to keep the country in the euro on Tuesday and not waste the “huge sacrifices” its population has made in recent years.

Yannis Stournaras said an agreement between Athens and its creditors from the eurozone and International Monetary Fund to keep the country afloat was “not far away.”

The leaders of Germany, France, the International Monetary Fund, European Commission and European Central Bank agreed late on Monday to work with “real intensity” to clinch an agreement, but questions remain whether Greece’s government will meet the demands being made of it by its lenders.

“Nobody has a mandate to take the country out of the euro.. so I am very optimistic that a Grexit will not occur,” Stournaras said during a panel discussion at an event organized by think-tank Chatham House.

He added that recent polls showed that 80 percent of Greeks wanted to stay in the euro zone and 65 percent of those surveyed were willing to make further sacrifices to do so.

“We need a political system which will take responsibility and to respect the sacrifices by the people that have been made up to now,” Stournaras added.

“Decreases of living standards in the order of 35 percent are very unusual for an OECD country so this was a huge sacrifice of the Greek people, to make Greece viable and stay in the euro. So I think the political system should respect this.”

In order for a deal to be clinched though he said both sides needed to find a “fair compromise”.

“I think the main catalyst (for a compromise) is to aim for a more reasonable primary surplus in the future, and in exchange for this more structural changes,” Stournaras said.

“Greece does not need any more tax rises – but there are still many exceptions in Greece both in the tax sphere and in the social security.”

“By eliminating these exceptions, which by the way do not benefit the less privileged people, we can have a compromise. In my view, the compromise is not far away,” he added.

[Reuters]