Exclusive IMF Chief Economist Calls for Flexibility for Greece Because of Refugee Crisis

Maurice Obstfeld, the chief economist at the International Monetary Fund, has called for easing of the savings requirements for Greece. In the short term there should be some flexibility in terms of the budgetary targets, Mr. Obsfeld told Handelsblatt in an interview. At the same time, there is no avoiding structural and fiscal reforms, he said, adding that debt relief was needed. Mr. Obstfeld warned against falling back into thinking like nations, saying, “there has been a trend throughout Europe towards rejecting economic integration and looking for nationalistic solutions.” More cooperation is needed, not less, he said. What is most worrying, Mr. Obstfeld said, is the building of walls and fences again in Europe, a policy diametrically opposed to the currency union. Europe should find a way to share the effects of the humanitarian catastrophe by accepting and integrating refugees, he said. More effort is needed to overcome the euro crisis, Mr. Obstfeld said. He listed measures such as creating a European deposit insurance, a suggestion which has been opposed in Germany. He criticized the fact that in their efforts to stimulate the economy, the central banks are largely alone. He said there is no support in terms of fiscal policy and less progress has been made than promised in terms of structural reform.