Greece can emerge from its current economic crisis and the measures being implemented by the government are “on the right track,” Nobel Prize-winning economist Christopher Pissarides said.
“There is a lot to be done and more long-term reforms are needed to avoid such a crisis in the future and to cope with the current crisis,” Pissarides told reporters in Nicosia today. “At last, the average Greek has understood that there is a major crisis and something has to be done about it. It is a unique chance for a government that wants to put forward difficult reforms.”
Greek Prime Minister George Papandreou imposed austerity measures, including higher taxes and lower wages, in return for a 110 billion-euro ($148 billion) bailout in May last year from the European Union and the International Monetary Fund.
The support given to the euro by Europe’s largest economies countries will help the currency survive the current turbulence, while the likelihood for Spain to fail is “a very low probability event,” Pissarides said. Last year, he shared the 2010 Nobel Prize in economics with Dale Mortensen and Peter Diamond.
In November, Ireland followed Greece by seeking a rescue, while investors remain concerned that the debt crisis will spread to countries such as Portugal, Spain and Italy.
Pissarides, the first Cypriot to win a Nobel prize, said he has agreed to a proposal from Cyprus’s finance minister Charilaos Stavrakis to be an economic adviser to the Cypriot government.