Harvard Econ. Professor Advises Greek PM

By Frannie Carr


June 21, 2011

BOSTON — Investors watched closely as Greek prime minister George Papandreou and his socialist government survived a crucial confidence vote for Greece's prime minister Tuesday amid unpopular austerity measures passed in the hopes of avoiding national default.
But the prime minister has some of his attention squarely focused on Cambridge, Massachusetts — or, more specifically, on the advice of a Harvard professor in Cambridge.
Richard Parker, an Oxford-trained economist and senior fellow at Harvard’s Kennedy School of Government, has known the Greek PM for four decades and has been a close economic advisor for nearly two years.  
“Since the fall of 2009, I’ve made a dozen trips to Greece. And I’m on the phone with Papandreou often times two, three, four times a week. I was on the phone with him Monday night at midnight for an hour and a half talking about this situation,” Parker said in an interview with WGBH's Emily Rooney.
Parker will board a plane to Athens on Thursday to give Papandreou one-on-one advice on the macroeconomics of recovery, as well as related politics and media strategies.

He says the Greek economy matters globally, and he thinks the country's neighbors in the European Union should step in to help it.
“I don’t think that Greece can ultimately repay this vast amount of money without imposing incredible hardship on the Greek people,” Parker said. “I think Europe is large enough and strong enough and will be much stronger in 2-3 years that it could voluntarily absorb some of that writing off of Greek debt – but that’s to be negotiated.” 

Parker will also advise Papandreou to spend as much time at home as he can. "I would like him, and he would like, to be able to spend more time in the country with the ordinary citizens. The problem is that the nature of this crisis has taken him so much outside of Greece, he's been on a shuttle plane, basically, almost constantly," Parker said.

Although Papandreou won the confidence vote, his popularity remains low. But Parker didn't say his friend should step down. "The opposition is also unpopular," Parker explained.

Papandreou doesn't have to call elections again until 2013 — and by that time, he thinks the economy will be well into recovery.

"We think that Greece is actually on target to start exiting its recession next year," Parker said.

GDP is starting to grow, Parker said, plus exports and tourism are both up dramatically. "It will have a big confidence impact, as people start to say, 'Oh, wait a minute, businesses are starting to recover, the tourists are coming, they're spending money,'" Parker said.

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