NEWS

Greece must tough it out, says EU President Rompuy

European Council President Herman Van Rompuy says the current discussion about Greece restructuring its debt is ?academic? and has urged Athens to continue with ?unavoidable? reforms rather than expect to discover ?magic solutions? to its debt crisis.

Speaking to Kathimerini ahead of his visit to Athens on Tuesday, when he is scheduled to meet with Prime Minister George Papandreou during a crucial week for the government, the European Union?s figurehead said that the debate over whether Greece should restructure its debt should not distract the government from making necessary changes.

?I am aware of the ongoing academic discussion over restructuring public debt, but in the real world there are no magic solutions,? he said. ?Greece has only been implementing its program for 10 months and we have to allow time for the reforms to bring results.?

Van Rompuy pointed to the time when he was Belgium?s budget minister and his country managed to reduce its public debt from 130 percent of gross domestic product to 114 between 1995 and 1999 as an example for Greece to follow. The EU president said that Belgium managed to reduce its debt to 84 percent of GDP thanks to even tighter economic management.

?This proves that with decisiveness and time, major financial adjustments are possible,? he said. ?The reforms will put the Greek economy in a good condition and will prepare the country to be competitive on the globalized market.?

Van Rompuy described the reforms, which include drastic public sector spending cuts, as ?painful but necessary,? but said it was vital the Greek people should not feel angry or alienated.

?If people feel that the burden falls mainly on the shoulders of the usual suspects – families, workers and small businesses – there is a danger of a political backlash,? said the Belgian. ?It is vital that we offer people some hope and that we convince them the sacrifices they are making today are necessary for a better tomorrow.?

Van Rompuy?s visit comes at a crucial time for the government as it is due to present finalized plans of its economic policy between 2012 and 2015 and for its privatization program this week.

This will take place against a backdrop of considerable upheaval within the ruling PASOK party. Papandreou is set to chair a meeting of PASOK?s parliamentary group on Wednesday, when he is likely to try and quell any rebellion within the Socialist party and urge MPs to pull together.