Ghost dog

Illustration by Manos Symeonakis

We all needed a moment or two to recover from Development Minister Michalis Chrysochoidis’s “the dog ate my memorandum” moment this week, but now the dust has settled it’s clear that regardless of whether it was a monumental gaffe or a misguided tactical move, the PASOK official’s plea of ignorance encapsulated the dilemma that’s been plaguing Greece throughout this crisis.

Hovering between confusion and collapse, Greece is suffering from the most extreme state of schizophrenia as it flits from all-out opposition to hands-down acceptance of the terms being attached to the emergency funding being provided by the European Union and International Monetary Fund.

Caution: Falling wages

Illustration by Manos Symeonakis

So this is what it’s come down to. The negotiations over wages in Greece due to take place over the next few days will be a defining moment of this crisis, not because a reduction in the minimum wage or cuts to private sector salaries will make a huge difference to the economy but because it is a test of whether those involved in the process – labor unions, employers, the government and the troika – are prepared to face the truth. It is test of whether someone is willing or able to step forward with some kind of coherent plan.

It doesn’t take long to think of several good reasons why reducing private sector wages during a deep recession seems a suicidal idea. They include the fact that it would further undermine withering domestic demand and likely precipitate the closure of more businesses on top of the 38,000 that have shut down over the last two years. The more fiscally minded might point out that lower wages means lower tax revenues, which has a heightened relevance at the moment given that recent figures showed Greece raised 50 billion euros in revenues in 2011 compared to 50.8 in 2010 despite imposing a raft of new taxes.

New Year, no time

Illustration by Manos Symeonakis

There was little to learn from the marathon meeting of PASOK’s political council this week apart from the fact that if he can preside over 12 hours of non-stop debate, former Prime Minister George Papandreou would soon find work as a telethon host if he chooses not to run for party leader again.

The lengthy and apparently pointless talks among some 40 PASOK heavyweights did, however, sum up perfectly the complete dislocation that now exists between political Greece and real Greece. It is likely that 2011 will go down as a watershed year in terms of the country’s democratic evolution, as the time when Greek decision-makers of all political persuasions found themselves so far behind the public that there was no hope of catching up.

Greece and the euro: The end of the affair

Graffiti by Absent

A few weeks ago, I was interviewed by a Danish journalist in front of Parliament. He took out a 2-euro coin, flipped it over and showed me the engraving depicting the mythological story of Europa being whisked off by Zeus, who transformed himself into a bull to achieve the task. It’s a scene that is usually known as the seduction, or even abduction, of Europa. “This coin shows the Rape of Europa,” the journalist said. “Do you think Greece is raping Europe or is Europe raping Greece?”

After picking up my jaw from the floor, I gave an inadequate answer about Europe and Greece having a consensual relationship that was going through a rough patch. “We knew all about each other when we climbed into bed together,” was my final repost to his jarring question. Of course, the truth is that seduction only really works when you don’t know all about each other. And, as we’ve discovered over the last few months, Greece knew little about itself, let alone about Europe, before becoming part of the euro.

Europe’s fiscal pact: The final irony?

Illustration by Manos Symeonakis

Last Friday, December 9 — the day when 26 of the European Union’s 27 leaders agreed on a “fiscal compact” designed to save the euro and place the bloc on a sounder economic footing — marked exactly 20 years since Germany and France presided over a similar meeting that led to the drafting of the Maastricht Treaty, which became the cornerstone of the single currency.

Among the euro entry conditions agreed in 1991, a country’s public debt would have to be limited to 60 percent of gross domestic product and its deficit to 3 percent of GDP. The first countries to breach the deficit rule were France and Germany in 2003 but they voted to let each other off, thereby undermining the rules that they had been instrumental in drawing up. So, there is more than a hint of irony in the fact that two decades on, France and Germany are again at the forefront of pushing for strict budget discipline, this time as a way of keeping the euro from falling apart.