Tag Archives: Greek deficit

When silence is the best policy

KaramanlisPapandreou_Gump

Despite receiving a bullet in the post and having an MP from the Independent Greeks suggesting it won’t be long before someone shoots him, Finance Minister Yannis Stournaras is more likely to be concerned by this week’s “friendly fire” rather than any other kind.

Unhinged Cretans and boorish opposition MPs are hardly the worst that Stournaras is going to face during his time in the scorching hotseat at the Greek Finance Ministry. Attacks from within are a different matter, though.

A number of New Democracy lawmakers lined up to take pot shots at him over the past few days for a number of reasons, top of which was his decision in recent interviews to discuss the fiscal derailment that took place between 2004 and 2009, when Greece was led by Costas Karamanlis and his conservative government. In doing so, Stournaras has broached a somewhat taboo subject.

“I will show you a chart with annual public spending as a percentage of GDP,” he told Sunday’s Kathimerini in an interview. “From the early 1990s until 2006, when it reached 45.2 percent, there were few fluctuations. Immediately afterwards, in 2007 it rose to 47.6 percent, in 2008 to 50.6 percent and in 2009, it skyrockets to 53.8 percent. The only way I can describe what happened after 2006 is an economic derailment.”

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An issue of statistical significance in Greece

A Greek flag flies behind a statue to European unity outside the European Parliament in BrusselsThe head of Greece’s statistics agency, Andreas Georgiou, is to face a criminal inquiry. An ex-employee of the Hellenic Statistical Authority (ELSTAT), Zoe Georganta, has accused him of colluding with the European Union’s statistical arm, Eurostat, to inflate Greece’s deficit figure for 2009, thereby justifying Greece’s EU-IMF bailout, signed in May 2010, and  its drastic austerity measures. Georgiou vehemently denies the charges.

Financial prosecutors have referred the matter to a special magistrate and the Greek justice system will have to decide on the validity of each side’s arguments.

Beyond the judicial process, some observations about the case are needed as it goes to the very heart of understanding how Greece’s public finances veered dramatically off course and the country turned to the eurozone and International Monetary Fund for emergency loans.

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Blood, sweat, but mostly tears

Minus cigar and bulldog, Finance Minister Evangelos Venizelos declared on Sunday that, like Winston Churchill, the government had nothing to offer but “blood, sweat and tears.” It was a preface to his government again demanding from the Greek people that they offer all this plus one other vital factor: more of their cash.

When we come back to look at the time line of Greece’s crisis, there is little doubt that Venizelos unveiling a new emergency property tax in a bid to plug a hole in public finances to meet the targets set by the troika will be seen as the moment the silent majority’s grudging tolerance of the austerity program crumbled under the weight of unfairness and grim financial reality.

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London calling. Listening, Athens?

Illustration by Manos Symeonakis

On the day London was awarded the 2012 Olympic Games, we played The Clash’s “London Calling” on a radio show I co-hosted in Athens. The song — about a world slipping toward some kind of destruction — was played by a lone guitarist at a recent event to mark the one-year countdown to the English capital hosting the world’s biggest sporting event. A few days later, its lyrics — such as “London calling to the underworld/Come out of the cupboard, you boys and girls” — proved an appropriate soundtrack to possibly the worst civil unrest, rioting and looting the city has ever seen.

It seemed a delicious irony that an e-mail informing me about ticketing arrangements for the 2012 Olympics should arrive in my in-box on Tuesday afternoon, as London and other cities braced for a fourth night of rioting. But there is nothing amusing in seeing the city you were born in being ripped apart a few weeks after the city you live in suffered the same fate. I can feel nothing but sadness at seeing areas I know well, places where friends live and a neighborhood where my father ran a business for more than two decades being decimated by youths who appear to have no comprehension of the damage they are wreaking on communities.

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Hey Merkel, leave the Greeks alone

Illustration by Manos Symeonakos

A year ago, a month ago, perhaps even a week ago, German Chancellor Angela Merkel’s comments about Greeks needing to work more would have gone down as badly in Athens as a joke about room service in the Strauss-Kahn household. They would have sparked another exchange of barbed comments between Athens and Berlin and further histrionics from the more rabid elements of the media in the two countries. This time, Merkel’s words landed quietly on a pile of other comments made about Greece over the last few days.

Greeks have been hit this week by a barrage of opinions on debt restructuring, new loan agreements and even political consensus. And at the end of it, they are none the wiser. Restructure now, say some economists and European officials. It is too early, others say. Only soft restructuring should be discussed, argue some experts. Substantial haircuts are required if Greece is to survive, say others. Greece will need new loans to stay afloat, say the whispers in the corridors of power in Brussels and Washington. We are not applying for any more emergency funding, say those who hold power in Athens. Get your political parties to agree, says a European commissioner. It is our democratic right to disagree, says the leader of the Greek opposition.

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