Interview with Klaus Regling, Managing Director, ESM (European Stability Mechanism)

Interview, Korean Herald, 1st August, 2016 (pdf)

Korea Herald: "What will the consequences of Brexit be for the British and European economies?"

Klaus Regling:"The U.K. has decided to leave the E.U., which is the epitome of cross-border cooperation in terms of free movement of people, capital, goods and services. I do see problems for the British economy, although the impact on the rest of the 27 E.U. countries would be relatively small, according to our research. One exception will be Ireland, which shares a border with the U.K., and exports half of its goods. As an economist, I am convinced that trade, globalization and international cooperation are essential for raising living standards and growth rates. Trade between the U.K. and Europe will continue following Brexit, but at a lower level".

What is the situation with the Greek debt relief?

"We are in the middle of the third adjustment program in Greece. Greece has been the most difficult case we had to deal with, as other countries needed only one program, and implementation in Greece was interrupted in the first half of last year when the new administration of Prime Minister Alexis Tsipras took office. Greece’s economic problem occurred through a combination of factors. The country had the most severe misalignment out of the five -- the largest fiscal and trade deficits and other structural problems -- and needed to make the most difficult adjustment. Its weak administration also lacked implementation capacity. But since last August, we are back in a cooperative mode, and if Greece sticks to the reform agenda, I am confident it will successfully exit the program in about two years’ time".


Related:

Spiegel Online International - Financial Expert on Brexit: 'The British Always Want Special Treatment'