Greece will need a fourth bailout due to unsustainable debt pile says former finance minister

The Telegraph — Greece will need a fourth bailout as its debts remain utterly unsustainable despite years of austerity and attempted reforms, according to former finance minister George Papaconstantinou.

A “radical liberalisation of the economy” is also necessary as the country needs to attract foreign investment because Greece lacks the domestic resources needed to grow its industries, he told an audience at the London School of Economics.

“Pretty much everyone agrees that Greek debt is not sustainable,” he said. “Is there a prospect of a fourth bailout? Yes. Even in the best case… I doubt that Greece will be able to stand on its own feet.”

He said that governments have only found themselves able to implement economic reforms by blaming external powers for forcing them onto Greece, adding that he used this tactic himself to push more reforms forward.

He noted that Greece was the first EU country to vote a populist party into power. But he also hopes the country’s political centre can recover and implement reforms more honestly and effectively, something that he as a key member of the Papandreou government failed to do.

“We could pioneer a closing of the circle, not in a return to politics as usual, and not a return to the way things used to be,” he said, denoting that he would perhaps be interested in making a return to politics as part of that political center-left.

The Papandreou government was elected in 2009 on a platform of “there’s money available” and a pre election commitment to eliminate corruption and cronyism.

In 2015 Mr Papaconstantinou, while denying any wrongdoing, was found guilty of a misdemeanour by an Athens Court for tampering with the so-called “Lagarde list” of potential tax evaders, but was cleared of more serious felony charges.