Soon after being propelled to international fame for publishing the Lagarde list and facing prosecution for it, journalist Costas Vaxevanis wrote in an opinion piece that “democracy is like a bicycle.” As Greek MPs debated the merits of which politician to probe in connection with the handling of the depositors list for 14 hours on Thursday, democracy began to look more like a unicycle, ridden by a giant clown.
There have been many jaw-dropping moments in Parliament since this crisis began. For instance, who can forget becoming part of a parallel universe as the world waited for George Papandreou to receive a vote of confidence in late 2011 just so he could resign a few days later? Votes on midterm fiscal plans, bailout packages and new austerity measures – Greece has seen it all over the past few years. But none of those moments could match the sheer futile hysteria of Thursday’s debate.
It’s a measure of the absurd situation that Greece and its lenders have got themselves into that it’s highly doubtful whether there is a single Greek MP or European official that believes the austerity package due to be voted through Parliament around midnight on Wednesday will contribute towards the country’s recovery.
Apart from the dewy-eyed optimists (it would be a shock if there are any of those left), there is unlikely to be anyone who has confidence that the 13.5 billion euros of spending cuts and tax hikes over the next two years will play a part in halting Greece’s incessant decline.
The 2013 budget foresees a primary surplus – the first in over a decade – of 0.4 percent of GDP on the back of the latest measures. While achieving this surplus is one of the milestones on the road to stability, there are serious questions about how it should be achieved. With approximately 9.5 billion euros of measures (equivalent to 4.5 percent of GDP) to be implemented next year, the program of cuts demanded by the troika makes a mockery of assertions by leading economists and even the International Monetary Fund managing director Christine Lagarde that frontloading will end up being destructive, not just counterproductive.
Posted in Economy, European Union, Greece
Tagged Austerity, euro, eurozone, Greece, Greek bailout, Greek crisis, Greek debt, Greek Parliament, International Monetary Fund, Recession, structural reforms