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Sarris says Greece’s actions counterproductive

Former finance minister Michalis Sarris

A “no” vote in next Sunday’s referendum in Greece will not strengthen its bargaining position with international lenders, while it will polarise the population, former Cypriot finance minister Michalis Sarris said in an interview over the weekend.

“We start with the assumption that Greece wants the best possible deal. In that context, I will not have resorted to the referendum,” Sarris said in the interview with the  Branko Milanovic Blog, which was also published on

“The “democratic mandate” card had already been played with limited success. If you push me to give a specific answer, I would vote “yes” because it takes us back to the negotiating table with the chance of a better outcome,” Sarris said.

The former minister said he believed there was a real chance early to reach a workable solution. He said the Greek side overplayed, had shown disrespect to the technocrats working on the issue, and claimed the mandate to solve a more general euro problem. “And in those respects it was a counterproductive approach,” he added.

Sarris said debt rescheduling was in his view an important part of a comprehensive approach which would have had a chance to work. But debt rescheduling could not be a substitute for reforms that would  support growth.

“In my view, if the Greeks came forward with bold reform proposals they would have forced the institutions, particularly because the IMF was already pushing for some debt relief, to include more concrete promises for lightening the debt burden as progress was made in the reform agenda,” he said.

He added that he would have linked lightening of the debt to the reform not only because it would have given the EU a chance to do something novel in dealing with the advanced economies but also because reduction of the debt combined with an improvement in economic activity would allow debt/GDP ratio to go down, and the debt burden to become more sustainable.

Asked he if would have accepted the creditors’ programme even if there was no debt reduction at all, Sarris said a good programme with positive growth prospects would have eventually forced some sort of debt relief.

“So I would not have caused a rift at the beginning and would have taken my chances of debt relief as programme implementation proceeded,” he said.


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