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Wednesday, May 30, 2012

Portugal - a role model for Greece?

I am not familiar with the situation in Portugal but after I had listened to this interview, I certainly wondered why Greek political leadership couldn't talk like the President of Portugal does. It had all the right soundbites like: "Portugal has a tradition of keeping its commitments"; "We must exercise strict austerity but, at the same time, we take initiatives for growth"; "We want to attract foreign investment"; etc.

So let me be skeptical and assume that this is all talk whereas the action is quite different. Even so, if the talk is "right", it makes a world of difference regarding the options one has for actions!

"The problem is NOT Greece!"

This statement is being heard more and more often inside and outside of Greece, and every time I hear it, it tests my patience. A successful demagogue starts with themes which people would like to imagine as truths, then he declares them as truths and, before he knows it, he has many enthusiastic followers.

There is not just one problem; there are many problems in the world! The Eurozone has a big problem (in which Greece is caught up) and that must be solved at the level of EU-elites. France has big problems (overexpanded public sector; diminishing competitiveness) and they must be solved by the French government. Germany has big problems (a demography working against its future; unemployment in the East) and they must be solved by the German government.

And in the same vein, Greece has its own problems which can only be solved by the Greek government. The only thing is: the Greek problems are of a gigantic magnitude as the task is basically to reform the entire country from A-Z.

How is Greece doing at solving its own problems? Well, I am now witnessing the second Greek election campaign in my lifetime and, so far, I haven't heard anything about party proposals how to solve Greece's own problems. More than 99% of Greeks seem to be discussing a Memorandum which far less than 1% of Greeks have read. Frankly, one could get the impression that Greece's only problem is the Memorandum.

What ever happened to modernizing public administration and increasing efficiency in the public sector? To liberalizing the professions? To attracting foreign capital and know-how through privatizations? Etc.

Not much, at least not much as far as I can determine. Those seem to be someone else's problems. The Greek problem is the Memorandum...

I close with a quote from the Greek Default Watch blog: “This lack of ownership (of problems) risks becoming the greatest casualty of this crisis. Greece has changed from being a fat kid that was going on a diet to a fat kid that wants to sue the candy company. In the end, the fat kid may get a check – but will he get any thinner?”

1 comment:

  1. I have speed-read the memorandum. It's actually significant that this is the term used for the Structural Adjustment program in the greek media. The memoranda are just lists of commitments (and deadlines for them) that the greek government makes.

    They're not the structural adjustment program at all, one only sees that at all fully at EU sites, such as:

    http://ec.europa.eu/economy_finance/publications/occasional_paper/2012/op94_en.htm

    Which is, of course, is why Syriza can simultaneously demand tax reform to be able to tax the rich, while denouncing the extremely specific programs for tax and justice reform in the program as "barbaric".

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