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FACTDROP: Greece's Mission Impossible?


Greece's Mission Impossible?

Πηγή: New York Times
Nov 15 2011

No comic book superhero was ever given a tougher mission than the one just undertaken by Lucas Papademos, the gray-suited, gray-haired economist with the shy smile who has been appointed head of an emergency government in Greece.

If Greece stays on its feet and remains in the euro zone, this will be the strongest signal to the world that the Europeans are serious about saving their currency; this will help save the euro and, as Chancellor Angela Merkel of Germany has said, saving the euro will save the European Union.

Mission impossible?

No superhero has had so many odds stacked against him. The politicians who appointed Papademos to head a fractious three-party coalition have made clear they want him out of the way soon; after two years of mostly pointless austerity and missed targets, the citizens of Greece are suspicious of change; many of Greece’s E.U. partners make no secret of their haste to cut Greece off from the euro zone and the European Union. To undo the damage of decades, Papademos has three months.

No superhero has fought for higher stakes. A nation held hostage by the failings of its political class and burdened by many years of irrational spending has invested its hopes in a former vice president of the European Central Bank and longtime governor of Greece’s central bank.

Even before his first policy statement, 55 percent of respondents in a Greek poll said they trusted him. Perhaps this was so mainly because they needed to put their faith in someone different from their politicians. Today’s troubles are nothing compared to what will happen if Greece is forced to abandon the euro.

Not only will approximately €180 billion in bank deposits be vaporized by instant devaluation, but, free of E.U. and I.M.F. constraints, the political class will go back to the free-spending, unreformed ways that destroyed the economy in the first place.

Papademos’s fight is for the honest citizens — those who see half their salaries going to taxes and social security dues and who get poor public services in return. These are the millions of hard-working citizens and immigrants who have nothing to hide, who have paid taxes upon taxes and put their savings in the country’s banks rather than spiriting them abroad (like tax dodgers). These are the people who kept Greece functioning when others cheated, when politicians lavished benefits on their favorites. It is they who will pay the bill and pull Greece toward recovery.

To keep Greece in the euro zone, Papademos’s immediate tasks are to secure the next €8 billion loan instalment that will keep Greece solvent; to ratify a new €130 billion bailout from the E.U., the European Central Bank and the I.M.F.; and to negotiate a 50 percent debt writedown with private sector creditors. To achieve this, he must get the parties supporting his government to sign a commitment that they will abide by the agreement with our creditors.

The main opposition party, New Democracy, has stated that it would sign no such agreement and that it expects Papademos to make way for elections on Feb. 19. The party has obviously not learned the lesson from the failure of the Socialist Pasok government, which was forced to resign and hand over to a coalition that includes members of Pasok, New Democracy and the far-right LAOS party. Even with a majority in Parliament, Pasok could not implement reforms. It is highly unlikely that any other single-party government will.

But politicians are not the only problem. Unions and small opposition parties, which talk of toppling what they call the “bourgeois system,” have been merciless in resisting every reform. These include reduced benefits, public-sector layoffs and the opening of closed-shop professions. Protests have often turned violent, with antiestablishment militants taking the opportunity to attack the police and other demonstrators, creating the impression that all protests are violent and Greece ungovernable.

If Papademos can gain the trust — or at least the tolerance — of such groups long enough to start implementing reforms, he will succeed where others either failed or did not dare to go. And he will achieve this only if he is seen to introduce the spirit of justice in Greece, with everyone paying taxes, with laws that are enforced without fear or favor, where hard work is rewarded.

Reform is the key to Greece’s future — and the most difficult task. Even the burgeoning number of economists who declare that Greece should leave the euro in order to save itself agree on the need to make the economy and society more rational.

And yet, leaving the euro would be a death sentence. No only would it strip Greeks of the benefit of having a strong currency for the first time in their volatile history, but it would reward all those who have repeatedly cheated the rest of us and have hidden their euros abroad, waiting for an opportunity — such as a return to the drachma — to wipe their debts clean and then buy up an impoverished Greece on the cheap with their euros. If Papademos manages to hold together his coalition, if he wins citizens’ trust and manages to sideline or disarm unions and opposition groups, if he is supported by our E.U. partners, Greece may gradually begin to change. And this will turn the tide of public opinion in Europe.

Greek and foreign media, Greek and foreign politicians, have repeatedly exaggerated the benefits, early pensions and other lunacies in Greece’seconomy. This has obscured the greater problem: the gross inefficiency of a society based on the age-old patronage system of votes-for-benefits.

Papademos, the outsider, could change all this — providing a new vehicle for reform-minded members of the old parties while also attracting other talented outsiders to try help their country. The people of Greece are ready for this. They know that the charismatic populists of the past brought nothing but ruin. Perhaps they hope that with Papademos at their helm, this is the time for every man and woman to join the effort to rescue their country from bankruptcy, poverty and isolation. United, we can win.

Nikos Konstandaras is managing editor of the Greek daily Kathimerini.

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