Thursday, March 7, 2013

Greek politicians detach from reality

Greek politicians are apparently resisting demands for the liberalization of the economy and budget cuts, in the hopes that Europe will pay a bigger part of the bill. That is provided that Angela Merkel loses her upcoming election in Germany, and that the Social Democrats win power. So reports the German weekly Der Spiegel. Given that the IMF is now inclined to support an easier deal for programme countries, that strategy could pay off in theory, provided Greece is truly committed to reforms on a modified timeline.

What is more worrying is evidence that the Greek political class has no intention of reforming. Andreas Georgiou is the country's head statistician since 2010. Among other things, he is responsible for reporting the country's accounts, which include its government deficit. Georgiou was brought in as a well-repected statistician from the IMF after it became clear that the country's existing statistics people and the government had lied about the extent of the country's public sector deficit, and had been lying about it for years.

Threats of a lawsuit have been swirling since 2011, an attempt to intimidate Mr. Georgiou, and now the lawsuit has been made in criminal court, that he is working as part of a German conspiracy to undermine the country by inflating the deficit figures. What it shows is that Greece has not learned its lessons about honesty and integrity in public affairs, and that some bloodletting has to take place in Greek public administration. It appears to be retreating into a paranoid, hysterical effort to defend the right to lie, and to demand handouts for any reason. That may be coming from members of the statistics authority, but it doesn't happen without the compliance of the government and of the courts.

Europe has to respond, and target the Greek state directly. And it has to respond now.

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