Jul 02

Europe with Greece or Greece in Europe: a hard-worked perspective with no more than long-term and marginal but sustainable returns

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How come that any rational European policy maker, those of the IMF included, could have expected that the Greeks, famous for their emotional behavior, could stand for such a long period of austerity and misery, in order to save money and invest to the benefit of their children and future generations?
Even worse, as if acting intentionally, in order to make the above scenario more difficult to happen, almost all the political staff in the country had, already from the start of the public finance adjustment programme, adopted the argumentation that, at first, there were some “bad” tax-avoiding rich Greeks and foreigners, together with the German and other “… arms dealing multinationals”, with the support of the corrupted governance of all previous governments, which have brought Greece to the verge of the bankruptcy. And further on, that not only the austerity could not be the solution to the problem (“wrong recipe”) of the huge public debt, but contrary to this, it was the programme that caused the crisis!

The argumentation goes that it was the programme that has brought such a misery to the society and the economy to such recession levels, without even solving the “public debt issue”, while keeping Greece in the margins. And that the governments, from year 2010 to the beginning of 2015, were sort of easily bending to the pressure from the (“cruel”) creditors and the troika, adopting measures which were not in fact necessary to bring order to the public finances, and introduce necessary reforms to the public good systems and to the product and service markets. While, they were only introduced to bring more pain and misery to the Greek people – making all assets in the Greek territory really cheap to be bought by foreign funds and companies (“… vultures stealing Greek society’ s property… ”).
I would dare say that it was a fight already lost before its start! Given that the European partners and the troika, together with really few members of the Greek society, and a small minority of Greece’ s political staff, actually those that had the experience of government posts during this difficult period, were alone giving this fight. When the prevailing majority was adopting the “story” – easily communicated by the Greek media –, the one of the “blackmailing” of the Greeks, in order that the creditors ensure that they will get their money back!
The “Syriza” party had only to win a rather easily fought election, which has “formalized” a strong representation in the parliament of all those anti-MoU parties, and which has there on been used as the “argument” to justify a radical change of policies – in fact to nowhere! Just asking for the “restoration” of previously (before the crisis, year 2009) regime, in areas like health and social security, vocational and general education and employment and labour market and the public administration – including also the “restoration” of the state-of-play as before the few reforms that were introduced, e.g. to fight the closed-shop status of many professions (drug-stores, trucks, etc.). And all these, while public opinion is still (!!) expecting increase of wages (minimum), without any increase in taxes, reaching at the same time a minimum public primary surplus, even after the recent period of more than six months with the economy diving again to recession levels.
The highly challenging job of getting a deal with the newly elected “Syriza” government is becoming even more steepening because of two complementary factors. At first, the aim of the deal is to close the extended (till the 30th June 2015) Programme and then to plan a follow-up support framework, with the necessary reforms and development policies, while staying on with the public finance adjustment effort.
The first factor corresponds to the similar one, prevailing during the beginning of the Samaras’ led government, when government posts were then taken up by anti-MoU politicians. Who had in fact to work and move on with an in-competent and ex-ante hostile administration. Yet, at that time, it was not the majority of the government posts staffed by the previously anti-MoU politicians and, even those ones, had already some experience in government, in order to get a quick touch with the reality.
In the “Syriza” & “ANEL” version almost everybody in government posts has not any clue about governance and at the same time are carrying the “only truth”: they are elected by the Greek people to radically change the policies of the Programme – rejecting in principle and ex-ante any sort of comprehension that it is this Programme that has been extended and that it is this one that needs to be finally reviewed, while preserving Greece’ s finances as a member of the Eurozone!
The second worsening factor corresponds to the dominant political argument, well set in the minds of the “Syriza” and “ANEL” politicians, that it is the implementation of this Programme, representing the most conservative and monetary circles in Europe (even worse than the US ones), that brought recession and pain and caused the crisis. And, that is why, it is necessary to change, actually by “restoring the past” and adopting demand boosting policies to get out of the vicious recession cycle!
This argumentation is further supported by naïve simplifications about preserving and even increasing pensions and public wages (boosting consumption!), and coupled by equally naïve assertions that the money we need (to sustain high public deficits to boost consumption and development) will become available by other “better” creditors, like the BRICS, especially if we get out of the Eurozone and we “get rid” of the European creditors (and the ECB). This corresponds to an ideologically strong political agenda, which unfortunately has nothing to do with the reality, but still supported by naïve arguments from well acknowledged economists, especially in the US – like Stiglitz and Galbraith (the “James K.” not the “John K.”) to name a few.
And Greek people decided to “buy” such an argumentation, preferring – being easier – to … match the reality to the ideological perceptions, than accepting the reality and understanding the problems, using rationality and evidence-based policies to address them!
Those of us considering ourselves members of the European societies and potential contributors to the great and still much promising European project, need to think and point to certain steps, which may save Greece in Europe and prove once more that Europe is the most important historical development in the global scene.
The absolute necessity here is that the European community needs to find the way for a consistent and reliable communication to the Greek society and public opinion, about the scope and the justification of the work and effort – mainly invested by the Greek people – as well as of the returns achieved and anticipated, from the adjustment programme. Especially after the adoption of the reforms introduced, in the public sector and in restoring open competition in the product and service markets – including the privatizations. The message of such a communication is that policies’ adoption and implementation, especially serving progressive reforms, is not any more an abstract ideological or political issue, but an issue of reliability and of just and competent planning and hard work as well as continuous evaluation and impact assessment. And that this approach is the only feasible for the Greek society to stay on with progressive developments of smart and inclusive growth, within Europe.
This message needs to reject the dominating argumentation of the “Syriza” government and widely adopted “story” in the Greek media. Which goes like that policy making and implementation is only a matter of political handling, just having PM Tsipras dealing with President Holland and Chancellor Merkel, and with Commission President Junker as an observer, representing the broader European interests. Adding that, in the name of the latter, “Syriza” has been “elected” in order to fight for a “better Europe” (against the “conservative” German led one, supported by the bankers – the ECB – and the IMF!).
Effective communication channels have to be established through European media, the primary message of which should be that the pro-longed “negotiations” are not taking place among former “enemies” – whereby whichever measure supported by the bad “creditors” and adopted in a potential agreement would correspond to a “loss” of the Greek people and vice versa. And that, contrary to this prevailing perception, the discussions are among partners sharing the common aim to support Greece and the Greek society to eventually enter asap to a virtuous, sustainable growth spiral, while effectively addressing the social cohesion priorities, taking care of those people heavily hit by the prolonged recession and the crisis.
Further on, trying to reach an agreement, while spreading the above-mentioned message, the Europeans, with the support of the IMF, need to (a) set the basics for the follow-up support programme, and (b) to include, both for the transition and for the new programme, a strong support, peer review scheme, with technical teams in Greece, in order to consistently and patiently work with the Greek public administration, in a direct collaboration scheme, ex ante approved (accepted) by the Greek government(s) in the next three years.
And finally, we need to face the critical question about the prolongation of the short- or even mid-term process with the so-called staff-level discussions and with the Brussels Group, which may continue towards even the end of the year 2015, to the (short-term) benefit of the “Syriza” government. It is becoming clear that, by technically preserving Greek state’ s capacity to serve its debts, pensions and civil servants’ salaries are also paid in time, the political sustainability of these government tactics are facilitated. While the economy is collapsing fast, potentially reaching an irreversible level, which will make the challenge to keep Greece in the Eurozone irrelevant at the end!
I dare present two concrete recommendations, apart from those mentioned above, about the agreement. First, that the high level European politicians need to state explicitly and consistently, with “one voice”, making PM Tsipras and other government members understand that any political handling will have to be settled on the basis of a feasible technical (financial programme) agreement. Only by meeting this condition, an agreement will be reached, which will benefit the Greek people and guarantee Greece’ s long-term sustainability in the Eurozone, with smart and inclusive growth.
And second, that whichever support programme, to sustain Greek economy’ s return to growth, will be based on markets’ and the public sector’ s reforms, keeping the same policy lines from the previous adjustment effort, which should not any more be considered an austerity policy framework, but a policy reforming one.

Eventually, it is for the Greek people to decide on the broader challenge of adopting and staying with the European growth and social inclusion policy paradigm or, alternatively, follow other “socially sensitive” (supposed to be progressive) agendas.

 

Dr Nikitas Kastis, MENON Network

June 2015

Jul 02

Critical aspects of the anticipated (new) Programme: voting for YES to Europe

Posts in english Comments Off on Critical aspects of the anticipated (new) Programme: voting for YES to Europe

The hereby attached document points to the main areas of reforms in terms of public finances and of the product markets for a new Programme to be urgently introduced and agreed upon the Greek government and Greece’ s creditors.

Pls read carefully and use it for further clarifications towards the Greek public opinion.

N.I.K.

YES Vote_solutions

Jul 02

The inevitable path to disaster with the NO vote

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