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.

“As Citizens’ Protection Minister, I had to tackle crime. I did not have time to study the memorandum,” were the immortal words uttered by Chrysochoidis this week in reference to his failure to pore over, or even skim through, Greece’s loan agreement with the troika in May 2010.

It’s a shame there wasn’t room for the, albeit meaty, memorandum in the phone booth that Chrysochoidis used to put on his crime-fighting costume. If he had the opportunity to read the terms of this — at the time — unique agreement, he may have been in a position to raise questions during Cabinet meetings, to create in unison with other ministers a coherent response to the measures being proposed.

Of course, none of this happened. The memorandum was cobbled together in a rush as Greece careened toward bankruptcy. It appears that the Greek government’s only constructive input was to provide the paper and ink to print the document. The lives of several saplings were cut short for no reason to produce Chrysochoidis’s unread copy.

The slapdash manner in which the memorandum was compiled and the unquestioning nature of Greece’s response to the proposals put forward by the troika established the pattern of a pretty destructive relationship, at least as far as the Greek economy is concerned. Chrysochoidis and his ministerial colleagues felt absolved of any responsibility in terms of policymaking. Rather than decision-makers, they became facilitators, which suited most of them down to a tee as that was what they had spent most of their life doing — finding synergies and connecting people with the aim of bolstering their party and serving vested interests.

At no point did the PASOK government, or any of the opposition parties, feel the need to develop their own response to the crisis; a made-in-Greece plan for getting the country out of the mire. Instead, they accepted the flawed formula handed to them by the troika. They didn’t even have the wherewithal to point out the particularities of the Greek economy, the tweaks that would have to be made and the measures that would have to be set aside.

The head of the IMF’s mission in Athens, Poul Thomsen, admitted late last year that the troika had underestimated how difficult it would be to push reforms through Greece’s notoriously (which usually means that something is quite widely known) labyrinthine, self-serving and inept public administration. So, rather than enjoy the benefit of reforms that could create greater competition and efficiency, and therefore growth, Greece suffered only the austerity that brought a deeper recession.

Maybe the men from the European Commission, European Central Bank and IMF could be forgiven for not appreciating the finer points of Greek bureaucracy, but where were the government officials to point them out? Where were Chrysochoidis and his colleagues to argue Greece’s case?

Their absence from the decision-making process has dealt Greece a harsh lesson but it appears to be one that we still haven’t learnt. Earlier this week, the same people who criticized Chrysochoidis for failing to do his memorandum homework cried out at the folly of MPs who voted against an article in the Finance Ministry’s multi-bill that would liberalize pharmacy opening hours. They also raged against deputies for being less than willing to vote for other reform articles, such as one opening up the legal profession to greater competition.

While the lawmakers may have had less than pure motives (an unhealthy number of Greek MPs are lawyers, for instance) it appears that the main source of angst over their unenthusiastic response to certain reforms was that it would jeopardize the possibility of Greece receiving further funding from the EU and IMF. Nobody can doubt that Greece needs numerous reforms and it needs them fast, but that doesn’t mean that it has to unquestioningly accept anything that’s proposed by its creditors. It doesn’t mean that MPs or ministers should not exercise any critical faculties when new legislation is brought before them. Greece has to accept tough medicine but it is not obliged to let anything be shoved down its throat.

If Greece is going to survive this crisis, it will have to take ownership of the reform process. Playing extras in the troika show will just not cut it. Someone is going to have to stand up for something, to show belief in a certain way of doing things and to draw the line at some lenders’ requests. Too often, opposition to the current process has been total rather than selective. This won’t work either.

The troika has proved — and even admitted — that it is fallible. Its policy of expansionary austerity is open to serious doubt. Current proposals such as further reductions to pensions and cuts to private sector salaries generate serious questions about whether the EC, ECB and IMF have really grasped Greece’s economic problems or have the best solutions for them. Yet, all the indications are that Greek politicians will adopt the tactic from the Chrysochoidis book of policymaking: blissful ignorance.

New Democracy and the Popular Orthodox Rally (LAOS) are behaving like passengers who got on the wrong train as they sit quietly in the corner without anything constructive to say. Nobody in the Cabinet seems to agree, or is willing to countenance, the idea of private sector salary cuts but nobody in the Cabinet is willing to suggest possible alternatives. Instead, ministers asked Prime Minister Lucas Papademos — the only Greek politician that has expressed the belief that the reductions could help — to negotiate the issue with the troika.

The abdication of responsibility that began with Chrysochoidis’s aversion to large printed documents is about to come full circle. The phantom dog that ate the minister’s memorandum is about to gobble up the economy as well.

Nick Malkoutzis

4 responses to “Ghost dog

  1. Let the dog take the seat of Chrysochoidis……..

  2. “If Greece is going to survive this crisis, it will have to take ownership of the reform process” — Amen! And Amen again!!!

    Thank you for making this point! Make it over and over again because Greece’s not having taken ownership from the start has been – in my opinion – the greatest weakness in the process. This is one of the major themes in everything I have published in my blog.

    I chuckle when remembering that I wrote 3 times directly to Mr. Papandreou about this. In one of my letters I warned him that if he did not assume ownership, sooner or later “comes the population’s outcry ‘we have had it; no more of this!’ And then, Sir, I am afraid to say, even you and your government will find out that you have had it”.

    And I also chuckled when, a few days after Mr. Papandreou’s resignation, I received a mail from one of his assistants. The lady apologized for not having responded sooner and asked what she could do for me now. I thanked her for her mail and concluded: “Sorry it happened; it didn’t need to happen; but life will go on!”

    http://klauskastner.blogspot.com/2011/09/letter-to-prime-minister-george.html

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