Greece, the Crisis and Implementation of the Austerity Measures; Seriously You Guys

Categories: 
Greece
Europe
The World

Venizelos+Papandreou

The world keeps on observing Greece with respect to the crisis and the measures that are supposed to save the country from a default, the Eurozone from collapsing and a potential second global recession.  Overall the measures outlined make sense and can keep the budget in place, even put the economy back on track.  However, one must ask the uncomfortable question that hadn’t been asked the previous 30 years: is Greece implementing the measures?

The current second batch of measures voted in July by the Greek parliament amidst protests, teargas and an extremely violent police force, came as a result of non-implementation of the measures voted 1 year before.  Unfortunately this is not the only example of non-implementation of measures/ legislation/ plans for the country.  Greece has a bad record in EU law implementation running one of the most preliminary references per country in the EU.  It often exceeds levels of pollution set by EU directives, does not apply human right articles to the fullest (especially when it comes to immigrants), and has forged data on its economy in the past.  More disturbingly perhaps, on the domestic level citizens also do not abide the policies set and quite often.  Taxation has been and still is a massive problem (I won’t get into the government legitimacy argument here), the country is pretty corrupt, citizens build property where they are not supposed to, and doctors over pre-scribe drugs on public budgets.  The organizations in charge of implementation or regulation seem to be distant or occasionally on strike (e.g. Greek IRS).

So, is Greece implementing the painful measures necessary, at least now that it is on the brink of default, in order to avoid the worst?  Well there have been extensive debates in parliament, agreements in ministerial cabinets, legislative proposals and loads of meetings overall in good terms with the IMF, Commission and the ECB.  However, implementation still remains to take place.  The opening of closed professions hasn’t happened after 2 or 3 “attempts”.  Public assets to be sold still remain...errr...unsold.  The privatization of public companies is untouched; more scarily public companies producing massive debt are facing neither restructuring, nor privatization, nor any firing.  The train/ rail-road company with more than a 1 billion euro deficit per year is still public, up and running and hasn’t faced any changes; courtesy of the Greek (maybe German) taxpayer.

What is perhaps more depressing is the fact that even when the government seems willing to act, it manages to do it half heartedly.  The measures require Greece to reduce excessive-structural public costs.  More clearly it has been asked to fire approximately 100-250 thousand civil servants out of a total of 760 thousand.  However, the government has been debating on the matter for nearly a year, it has also argued on the matter with the IMF, Commission and the OECD.  It now appears that is has agreed to apply the measure; only that instead of cutting the size of its public sector as significantly as proposed it will set only 30 thousand workers under a “labour reserve”.

These are small examples of Greece’s serious problem with implementing policy on any level on any field.  Blame falls both on parliament and the government but also on the public itself.  Political parties are not producing arguments, policy proposals or even debate of a respectable level; on how to deal with the crisis or at least which measures to implement and how.  As elections are coming up in 2 years time, the government is hesitant to apply harsh measures for fear of losing popularity points (they are not popular now anyway).  The other parties are simply stroking the ears of the voters and some might even be convincing them.  Finally, the long years of clientele relationships between Greek politicians and the public created a-cosy-turned-uncomfortable relationship.  It is difficult now to fire or fine people you once hired or turned a blind eye to their “ambiguous” activity for votes...Here is the point where the public gets part of the blame.  The larger percentage of the public consciously voted (and still votes) specific parties that are known for their vices.  Moreover, the public has not even demanded an upgrade of the argumentation or of the policy proposals.  Finally, the public has been expecting and still does, that a central planned authority will take care of everything.  This has created a dangerously anti-social behaviour where people ignore their surrounding environment because the “central planner” will take care of it.

The loan provided to Greece comes in instalments; the IMF, the Commission and the ECB (the OECD too) assess very carefully whether the country is implementing the measures necessary.  They have been pretty disappointed until now which meant great discussion over the next instalment due and now delayed for November.  Greece has enough money in its coffers until mid-November according the minister for the economy (whether you believe him is another story).  It is obvious at this point that time is of the essence, Greece does not have much of it (or cash) yet it still refuses to implement the measures necessary even at such a time.  Its citizens are disappointed, disorganized and unwilling (with some small justification).  As partners in the EU grow impatient (with quite some justification) and markets continue to worry Greece should probably get a move on; at some point its chances will run out. 

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