Happens In Greece The economic crisis from another point of view

Latvia’s Central Bank Chief Ilmars Rimsevics: “It’s really hard for Greece to avoid bankruptcy”

Procrastination in taking painful but necessary measures has reduced dramatically the chances of Greece to avoid failure, assesses the President of the Latvia Central Bank President Ilmars Rimsevics.

In an interview in Frankfurter Allgemeine Zeitung, the central banker of Latvia, which went bankrupt in 2007, notes that his country followed the diffucult path of internal devaluation, which included - among others - wage cuts.

"Those who say that without devaluation, adjustment is not possible, are those who don't want it to be achieved. People that don't want to take action always find a reason: the influence of the labour unions, the very small size of the country, the past - an excuse is always there to be found. The truth is that it IS possible", he argues.

Ilmars Rimsevics also highlights that in such a process speed is of the highest importance. "It would be better if all the major painful cuts could be applied within a year."

"After that, people and companies will be able to adjust and soon to retain trust" he claims.

This is exactly why he things went wrong in Greece. "The sooner someone acts, the faster people and markets are being persuaded", says the Chief of Latvia's Central Bank.

For mr. Rimsevics, the answer to the question if there's hope for Greece is simple: "Unfortunately there's very little hope. All these postponements just make things worse. The question naturally occurs, if politicians are thinking of the next elections or the next generations".

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