Interview to Huffington Post, Italy

1) Professor katsanevas what do you think about the political success of Beppe Grillo in Italy? Are you already thinking of an alliance between your movement and the Italian one? 

The Beppe Grillo expresses the indignation of the Italian people against the rotten
political establishment of the country, which accepted and imposed  policies of extreme austerity within a tough euro, a deadly combination that is killing Italy and all south Europe and not only.

2) This week, Fitch raised its rating of Greece to B- from CCC.  In your opinion the country's economic situation is slightly improving?

Lately, there is an effort to create a climate of economic optimism in Greece driven by Merkel

and Schäuble, as part of their effort not to disturb the euro zone before the elections in Germany. The data we have and the picture we see is that, our economic situation gets worse with no hope for a way out. The latest report by the European Commission for Greece, indicates that, there has been some slow progress, but   there is a need for new austerity measures to be taken. The latter shows that, the Greek tragedy, now in its fifth year, will go on.  As far as the upgrade from the Fitch is concerned, this falls within the same climate of creating an artificial optimism. Moreover, it is known that these rating agencies play their own speculative games.

3) Don't you think that an exit from the euro by Greece could be even worse for its economy and for the lives of its people? How much could be the value of 1 drachma against the euro and the U.S. dollar today?

On the contrary, the more and more painful austerity measures for Greece imposed by the Troika, lead us to worse days in a barrel without a bottom.  Our accession to the euro was supposed to improve, if not for the welfare of the Greek economy. But the opposite happened. Never in the postwar period living with our currency, the drachma, had we seen such a disaster like this. The hard euro might be the right glove mainly for central and north European countries, but not for the south. Our international economic competitiveness drops dramatically from the period before entering the euro zone in 2001, up to today.  So, being unable to restore our productive capacity, there is a perpetuation of misery and poverty, of new deficits and a spiral of new loans, a permanent political and economic subordination. Hopes for a better future are flying way. The economy has fallen into a recessionary vortex which leads to further contraction in domestic consumption and reduce the tax base. Imported products from our competitive economies that trade internationally with soft   currencies remain much cheaper than ours. The main focus of the regional Greek economy on tourism and agriculture requires labour-intensive production process. Labour costs can not be compressed below a certain level so that the total production costs will be lower or equal to that of our competitors. The room in a Greek hotel costs about twice than a counterpart in Turkey, Egypt, Bulgaria, Romania, Hungary and not only. Our oranges, lemons, peaches, olives falling from our trees and rot, are supplemented by cheaper imports from faraway. Due to threats against our territorial integrity by Turkey, our “alliance” from the east ( ! ), we are obliged  to spend to armaments the largest portion of G.N.P. internationally after the U.S.A. Imported Greek armaments from the west, in the last twelve years, cost about 100 billion Euros, a sum almost equivalent to our original deficit. And there are much more to say about the negative affects of the euro zone and European Union policies upon Greece and the south. Finally, in the case of the Grexit, according to our studies and plans,   the new  Greek drachma must be devalued by 50% in relation to the euro.

4) Regarding the plan to establish an alliance amongst the southern European countries, do you believe that countries like Spain, Portugal and Italy would risk to get out from the euro?

In our political program, we stress the need for promoting such an alliance of the countries of southern Europe, with a mandate of a memorandum for the exit from the euro for Greece, Italy, Spain, Portugal, Cyprus; return to national currencies, examine tiding the exchange rates of our currencies and the creation of free trade zones  ; establish common economic, banking, monetary practices, following acommon political and economic course for strengthening our geopolitical power, negotiate debts, exploit energy and productive resources by establishing the Autonomous Economic Zone connecting the Mediterranean link of Portugal, Spain, Italy, Malta, Greece, Cyprus and Israel, in accordance with the international law of the sea.

5) In Italy, the 5 stars movement is having many internal problems due to the lack of cohesion amongst the members. There is not any political structure in the movement. The model that you have idealized for "Drachma" has the same parameters as the Italian one. Citizens taken  by civil society without any political   background? 

The need for political cohesion and organisational structure is crucial when we want to promote our ideals and policies. At the same time, we must be careful not to become a dominion lover and loose our subversive nature. I hope that, the 5 Stars movement in Italy under the charismatic Beppe Grillo will   get through the problems of its birth and will help towards the right solution for our brother Italian people. In our case, our movement consists of a mixture of people with and without political background. We are  strongly  devoted to a common cause described  precisely  in our political manifesto and activated  by an organisational chart  well prepared to be applied within the next months. May I also add that, masses of people appear to be enthusiastic for our imitative, which we believe that may alter the present political scenario in Greece.

6) How do you see the political-economic situation in Italy? 

I feel unhappy to see a big country like Italy, the wonderful Italian people to suffer from economic decadence, following our modern Greek tragedy. Within the euro zone, there is no future for the GIPSI ( Greece, Italy, Portugal, Spain, Ireland) and not only.

7) In your opinion how Greece and other southern european countries will get out of this economic crisis? How long will it take?

By removing the Troika Memorandum, returning to our national currencies with controlled default, renegotiation and trimming debts, with elongation repayment of the balance and grace period of 2-3 years. And remaining within the European Union which must rediscover the initial values of its fathers, Sunman, Spaak, Spinieli, Antenaouer, etc. Supporting   the domestic entrepreneurship, production, and consumption; enhancing employment, in order to regain   economic competitiveness, leading towards a fairer distribution of the national income in favor of the underprivileged. Moreover, there must be a state control of the banking system, the black money capital flows and the speculative financial transactions, towards the abolishment of international tax paradises and  the separation between commercial and investment banking. There is also a need for a new Marshall plan with strategic investments for robust growth, coupled with a restriction of  the government expenditure, rationalization of public administration, combat corruption, impunity, bureaucracy, tax avoidance and evasion, establish a stable, simple and fair tax system ;  reorganizing a fair and effective health,social security and social policy system ; developing  effective plans for busting employment,modernizing education in accordance with both its spiritual aspects and its links with labour market needs. And as said, promote the alliance of the countries of southern Europe. Finally, in accordance with our estimations based upon scientific economic research, the crucial initial period of the transformation from the euro to our national currencies is extended between 4-14 months. The main enemy of this period is inflation and a serious Government, must be very careful when editing its own money. After this initial difficult period, the sun may rise again. May I also add that, our party the DRACMA,  of Five Stars, born in 1^st of May, focuses on the following five stars-basic positions : 1) Overthrow the Memorandum, 2) Return  to the drachma, 3) Robust growth with efficient Government ,3) National dignity,5) Social justice.

8) France is in recession, and many people are already talking about the new "Sick Man of Europe". Hollande denies any possibility of coalition between Italy and France against Germany. Do you think that the situation in France may be the new balance of power in Europe?

Now is the time for great France to stand up and regain its leading role for the sake of the French  and for all European people, who suffer, as said,  from  the tough euro, combined with  the extreme austerity monetarist policies.

Theodore Katsanevas ( Ph.D., L.S.E.)

Professor of economics at the University of Piraeus and ex member of the Greek Parliament