Therapy Prescribed to Greece Will Not Solve the Problem – Economist

Greece still has time until August 20 to negotiate the third financial aid package, otherwise it may face an economic disaster.

Further financial "injections" of creditors, however, can only remove the symptoms of the crisis, Dr. Stephan Schulmeister, a former researcher at the Austrian Institute of Economic Research, told Sputnik.

"Therapy that was prescribed to Greece, although it is advisable for this acute disease, will not solve the problem in the future," the economist said.

"Why has our economic system increasingly become at risk of financial crisis? And this danger occurred not in recent years, but has been existing for around 30-40 years?" he asked, adding that all these systemic issues have to be resolved.

Schulmeister argues that this is about a pan-European crisis and that Greece cannot cope with it alone. Therefore, he appeals for a new European course.

"Without modernization of the field of investments, as well as education and environmental protection, without an expansive policy Greece will not be able to get out of the crisis," he said.

The economist also added that such countries as Spain and Portugal are in a better position, because they have been using expansive economic methods for about a year.

To overcome the crisis, Greece should try to avoid budget cuts as much as possible. This, however, should be agreed upon with international creditors, Schulmeister argued.