Tuesday September 30, 2014 Search
Weather | Athens
26o C
17o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greece in the German election debate

By Nikos Chrysoloras

One of the most hotly debated issues in Germany ahead of the federal elections due to take place on 22 September is the future of Greece. But, unfortunately, what we mostly hear is the terrible noise of populism. There are hardly any voices of reason to soothe our ears. People have started throwing numbers around, in the most irresponsible and incomprehensible fashion, without any serious evidence to support their claims: “Greece will need 10 more billion euros,” says incumbent Finance Minister Wolfgang Schaeuble; “Greece’s financing needs are 77 billion,” responds Carsten Schneider, the opposition SPD’s spokesman on budget issues; “Greece should leave the eurozone and have its debt erased,” say the euroskeptics of Alternative fuer Deutschland (AfD). And so on…

<+sa_keim>The truth is, of course, that all of these numbers and claims are arbitrary. Therefore, they undermine the prospects for a well-informed public debate on the future of the eurozone periphery – a debate that German voters ought to have before they cast their vote in a few days time. The reality is that Greece has beaten its budget implementation targets for 2012, and data for the first seven months of 2013 support the projection that the country will do better than expected once again this year, finally reaching the seminal target of a primary surplus (i.e. a budget surplus, excluding payments for servicing old debts). The manufacturing PMI for August reached a 44-month high and Markit Economics now says it is not unlikely that recovery will get under way before the end of this year – earlier than previously anticipated. Early recovery means higher tax revenues, lower recapitalization needs for the country’s banks, and increased confidence, which will fuel investor interest for Greece’s privatization projects; in other words, less – if any – new money from the eurozone stability mechanisms.

Other indicators – namely unemployment, which currently stands at a jaw-dropping 27.6 percent of the working-age population, and Economic Sentiment (ESI), which fell for a fourth consecutive month in August – do not leave much room for optimism. In other words, Greece could go either way.

In light of these conflicting signs, the most responsible thing for German leaders to do would be to put their calculators back in their bags and stop mentioning numbers. Strangely enough, the most sober German view on the future of Greece comes from Klaus Regling, the managing director of the Luxembourg-based European Stability Mechanism: “Nobody knows how the world economy will look, how Europe will be doing or how important neighbors for Greece, like Turkey, will be doing in 10 months’ time,” he said in a recent interview, and questioned the “quality” of all those numbers that we hear, arguing that they are “very tentative.”

Hence, instead of trying to look through the crystal ball, German politicians should instead try to inform their voters on their vision for Europe and Germany’s place within it. On the rare occasions that they do just that, they project the completely misplaced stereotype that Germany’s participation in the support programs for the European periphery was a “philanthropic” operation. Well, it wasn’t. Not only has Germany not lost a cent from the loans it has provided to Greece – and other troubled countries in the periphery – but the emergency facilities which were created in 2010 have also ensured that the global financial system did not suffer a cataclysmic collapse, following a Greek bankruptcy domino. Greece would stand to lose as much as Germany after such a dramatic development. After all, Germany has probably gained more from the creation of the eurozone and the record-low interest rates after the outbreak of the crisis than any other member state of the Union. And finally, since it always takes two to tango, German taxpayers should be reminded that German companies are involved in many of the economic scandals that brought the Greek state to the edge of the cliff.

Stench of populism

What is even more worrying is that, once again, Greek people are hearing mainstream German politicians issuing threats and ultimatums. “Greece won’t get a cent without reforms,” said incumbent Chancellor Angela Merkel. Such statements really stink of populism. If the view of a Greek is not convincing enough, let me refer to independent assessments: Both the German Regling, and the Finnish vice president of the European Commission, Olli Rehn, have repeatedly said that Greece has achieved the largest fiscal adjustment of any country ever in history (more than 12 percent of GDP in the last three years). The sum total of austerity measures required to achieve this adjustment exceeded 49 billion euros, or 22.6 percent of Greece’s GDP in just two years.

Progress in structural reforms has also been impressive: The country earned first place on responsiveness to OECD growth recommendations in the latest OECD Going for Growth report. Moreover, Greece improved its global ranking by a staggering 22 places in the 2013 Doing Business report published by the World Bank. In addition, “in the last 12 months Greece has been the runaway leader among eurozone countries in terms of compliance with plans for its fiscal adjustment and in promoting reforms,” according to the annual “Euro Plus Monitor” report for 2012, issued by the Lisbon Council think tank and Berenberg Bank. Finally, according to both the European Commission and the OECD, Greece consistently records the highest number of hours worked by full-time employed persons in Europe and the developed world, and definitely much more than Germany.

In short, Greece started from a very low point, and an extremely precarious position, following a series of grave mistakes that led to effective default, but it has come a long way since 2010. The Greek people have made more efforts and paid a heavier price than all the other eurozone nations combined during these years. No stone was left unturned: The pension system, healthcare, labor market, public administration – everything changed in these years, amid wartime-like economic depression and draconian cuts. This violent adjustment took its toll on Greek society. Greece is suffering from the largest GDP contraction in its peacetime history, the highest ever levels of unemployment, and skyrocketing poverty levels. So, please, give us a break… If there is one thing that German voters should be reminded by their political leaders, ahead of these elections, it is that there are limits to how much can you can impose on a democratic society, before it implodes into something really ugly.

ekathimerini.com , Thursday September 5, 2013 (11:43)  
Next-day jitters
No sweet debt deals
In the danger zone
Collective discipline
Degas painting valued at 6 million euros stolen from Cypriot pensioner
Thieves have stolen a painting by French master Edgar Degas valued at 6 million euros ($7.6 million) from the home of a 70-year-old Greek Cypriot, Cyprus police said on Tuesday. The painting...
Elderly man dies while waiting to pay property tax
An elderly man died in Thessaloniki on Tuesday after collapsing at a bank while waiting in line to pay the ENFIA property tax, the Athens-Macedonia News Agency reported. The unnamed man, bel...
Inside News
Attica Bank says optimistic about plan to raise cash
Greek lender Attica Bank on Tuesday dismissed speculation that its plans to raise cash and plug a capital shortfall could flounder, saying it was confident of success. Unlike its larger peer...
Eurozone inflation numbers pile more pressure on ECB
Eurozone inflation slowed further in September on falling prices of unprocessed food and energy, a first estimate showed on Tuesday, sending the euro lower on expectations of further Europea...
Inside Business
SOCCER
All team sports suspended next weekend in memory of dead fan
The government announced on Monday the suspension of all team sports events in Greece scheduled for next weekend, October 4 and 5, in the memory of the Ethnikos Piraeus fan who died a few ho...
SOCCER
Karamanos punishes Michel for deeming him surplus
Atromitos forced Olympiakos’s first loss this season in all competitions on Saturday to allow PAOK to go alone on top of the Super League table on Sunday. Odds-on title favorite Olympiakos l...
Inside Sports
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Attica Bank says optimistic about plan to raise cash
2. Degas painting valued at 6 million euros stolen from Cypriot pensioner
3. Eurozone inflation numbers pile more pressure on ECB
4. Elderly man dies while waiting to pay property tax
5. Three teens questioned over video showing torture of dog
6. Greek unemployment dips to 27 pct in June, but still highest in EU
more news
Today
This Week
1. Next-day jitters
2. Roma camp off Mesogeion Avenue set for demolition amid reactions
3. No sweet debt deals
4. Commissioner-designate Avramopoulos to face three-hour interview on EU's migration portfolio
5. Roma camp evacuation postponed; flow resumes on Mesogeion Avenue
6. EU gives more aid to farmers hurt by Russia sanctions
Today
This Week
1. Alexander the Great's tomb not at Amphipolis, says Culture Minister
2. Greece may opt for unusual president to avoid snap polls, Venizelos says
3. Woman allegedly buried alive by accident in northern Greece
4. Salaries in Greece continue to slide, dipping 1.4 pct in Q2
5. Venizelos denies jihadis are being trained in Greece
6. Should you bet with Kissinger on where the world is heading?
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.