Samaras: Plan to fix Greece’s finances is failing

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Instead of strangling the Greek economy with tax increases, Europe and the International Monetary Fund should let Greece cut taxes to jump-start growth, said Antonis Samaras, leader of the centre-right New Democracy party and possibly the country’s next prime minister.

The austerity program for Greece “is a failure,” Mr Samaras said in an interview with The Wall Street Journal, his first with international media since becoming Greece’s opposition leader. Citing Greece’s poor tax revenues amid a worsening recession, he said: “I think our lenders will have to change their policy. My question is why do we have to go further down the drain in the meantime?”

That view has isolated him internationally.

But in Greece, Mr Samaras’s party is pulling ahead of the country’s embattled Socialist government in opinion polls. Many political analysts in Athens say the government might not see out its full term to 2013, and some predict new elections as early as this northern autumn.
That raises the prospect that Europe and the IMF might soon have to deal with Mr Samaras, an economist known to be unbending and self-confident. A political clash over Greek budget policies could derail the country’s bailout.

Samaras, a 60-year-old conservative and graduate of Harvard Business School, is coming under pressure from the euro zone and the Washington-based IMF to support the Greek government’s austerity policies. The country’s international creditors want a bipartisan consensus to underpin its effort to cut its deficit and avoid a default that could wreck investor confidence in the euro zone.

But Samaras instead warns that Greece will again fail to meet its budget targets under current policies. “In three months we’ll be asking for more money,” he warned.

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