Adriene Hill: After months of wrangling and a marathon meeting yesterday, European finance ministers have agreed on a $170 billion bailout deal for Greece. It’ll save the country from a messy default, but the terms of the deal are painful: banks who own Greek bonds will lose more than 70 percent of their investments, and an already squeezed Greek economy will be pinched even more.
For more on what Greeks think, we go to Constantine Michaelos. He’s the head of the Athens Chamber of Commerce. Good morning.
Constantine Michaelos: Good morning.
Hill: Now, how are the terms of this bailout going to affect Greek business?
Michaelos: Unless we can rectify the lack of liquidity, which we have been feeling over the last eight to ten months, I think that even healthy business units here in Greece will find it extremely difficult, if not impossible to operate in the coming months. Simply because of the so-called country risk, which is seen in a negative way by banking institutions abroad.
And therefore suppliers cannot possibly guarantee through their own banking systems the supplies that they’re making to this country, and therefore businesses here in Greece are going to be needing cash in hand in order to transact with foreign traders. And you can imagine, that is extremely difficult — if not impossible.
Hill: Now, where does Greece go from here, do you think?
Michaelos: I think that we all admit that we’ve got a bad deal in our hands. Even European leaders have pointed out the wrong mixture that this rescue package has. However, it was a deal that was done at gun point. It was ratified by the Greek parliament and appreciate that this is the law of the country today.
What we should do is work around this bad deal in order to enhance certain growth measures and stimulate the economy, because that’s the only way out. The private sector will be able to lead the way, provided it’s given the room to do so.
Hill: Constantine Michaelos, thanks so much.
Michaelos: Thank you.
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