Mahinda and Mangala agree on one point: Greece-like debt crisis hitting Sri Lanka
by Sanath Nanayakkare-November 27, 2018, 8:39 pm
Both former finance minister Mangala Samaraweera and current Finance Minister and Prime Minister Mahinda Rajapaksa have warned if Sri Lanka's effort to restore a stable government fails to happen within an acceptable time frame, the country will end up in a situation akin to Greece which defaulted on its debt in 2015.
Prime Minister and Finance Minister Mahinda Rajapaksa addressing the nation on Sunday said," This is the last opportunity we have. If our effort fails, this country will end up like Greece. We will have to work on this assumption that there is a situation of national calamity with regard to the economy. We will have to put a stop to burdening the people with taxes on the one hand and then spending lavish amounts on importing vehicles for ministers, spending money on ceremonies and excessive amounts on foreign travel as the UNP government was wont to do. I have to make it clear that after the next general elections, we will have to appoint a suitable number of ministers so as to be able to have a stable government. Before everything else, this country has to have a stable government. However that new government will have to keep expenditure under strict control. The President and the people of this country know that only we can extricate this country from such a crisis".
"The former finance minister claims that the economy is on a downward trend because of the change of government. President Maithripala Sirisena invited me to take over the government because of the collapse of the economy during the previous government. In such circumstances, what any democratic country would do is to hold a general election and have a new government elected to power. Because the President was in our government he knows how we handled difficult situations. We managed to find the money to fight the war. We managed to complete a large number of major development projects that no previous government had been able to get off the ground. We did not allow the people to feel the effects of the 2007 world food crisis. Even though the worst global economic recession since the 1930s took place in 2008, the people of Sri Lanka were not even aware that there was such a worldwide recession," The prime minister further said.
Meanwhile, former finance minster Mangala Samaraweera at a press briefing held last week said,"The actions of 26th October have irreversibly undermined Sri Lanka’s credibility in global markets – risking our ability to service future debt. We are being pushed towards a state of economic collapse where we could stumble on to a Greece like situation where it suffered structural problems in its economy. The only way to rescue Sri Lanka from this unfortunate and unnecessary crisis is for the President to recognise the Prime Minister and the government that was in place prior to October 26twhich continues to command the clear majority in parliament. It is still not too late to reestablish the government that commands the clear majority in parliament to present a budget or vote on account to authorise expenditure from the consolidated fund for the Year 2019".
However, at the same press briefing UNP MP Dr. Harsha de Silva said the EU and the IMF defended strong and credible debt arrangements for Greece and one can't expect Sri Lanka to get such emergency funds in case of a financial crisis.
