ECONOMY

Simitis must dare to call for bold reforms, like those voted on in France and Germany

Last Thursday, the French Parliament took an historic step (by voting to gradually extend the years employees must work before being eligible for a full pension to 42 years from the current 37.5). Even if the view of French Social Affairs Minister Francois Fillon – the equivalent of our own Dimitris Reppas – that the reform of pensionable years is «the greatest change since Liberation (from the Germans)» sounds a bit far-fetched, the result remains impressive. The same holds true of Germany and its health reform. Even if the opinion of a serious commentator that «Germany changes, therefore we must all change» sounds a bit over the top, it reveals a certain reality that was not evident a few months ago. Similar deep, radical changes taking place in these and other countries, despite the dreaded «political cost,» show the way we must follow here in Greece. If Prime Minister Costas Simitis was sincere in his speech at the ruling Panhellenic Socialist Movement’s (PASOK) recent Central Committee session, after he had ousted the party’s general secretary, Costas Laliotis, his sincerity will be tested in these areas where reform is most urgently needed. Of course, systematic preparation is needed ahead of reform. We should remind ourselves that France’s conservative government has succeeded where its previous incarnation – under Alain Juppé – not only failed but had also won the elections (in 1997) because of this failure. We should also note that the Socialists, who governed between 1997 and last year, while not daring to enact reform, did not exactly sit still. As soon as he had ensured some financing to prevent the social security system from sliding into debt, socialist PM Lionel Jospin set up a special commission to review necessary changes. The current French prime minister, Jean-Pierre Raffarin, who at one point found himself facing 2 million protesters in the street, as well as severe work stoppages, was right when he said, «We must have the courage to change.» It takes courage, as well, to enact legislation that will prolong the years of work ahead of a full pension to 40 by 2008 and 41 by 2012. The same holds true about Chancellor Schroder, who steered through Parliament a very important reform of health expenditure, achieving economies for the health system itself and the social security funds. His left-wing rivals within the party understood very well that it was better to proceed with reform now than for it to take place later under duress. The Simitis government, despite the renewed confidence expressed by voters in April 2000 – with certainly a mandate for reform, not stagnation – is way behind the two countries we have just mentioned. Moreover, it is very difficult for it to enact bold reforms only months away from a critical election. For the time being, it is promising reforms. The so-called Convergence Charter, which Simitis mentioned when he ousted Laliotis, the outline of which he has promised to present in early September at the traditional annual inauguration of the Thessaloniki International Fair, will be the government’s crucial weapon. If it turns out to be just another manifesto saying how the government will govern in the period 2004-2008 (that is, if it wins the next election) or until the end of the decade, it will suffer from the well-known, party-imposed generalities – victim to the usual ideological confusion, where the official party ideology directly contradicts the stated objectives and where the ambitious changes are mentioned but the government dares not spell out the means to achieve these changes. We should not confuse the Convergence Charter with the Social Charter. It may be necessary to achieve social consensus for a competitive, rich, progressive Greece but it is as necessary to convince the public that our economy will be able not only to defend the current standard of living but also can create extra wealth. A general direction has already been provided and everyone knows it. This is the famous «Lisbon Agenda» agreed to by EU leaders in March 2000, which describes the targets for a competitive Europe. If the government itself has systematically avoided proclaiming publicly the things it has agreed to, this was because it had neither made the necessary preparation nor developed the tools of reform. Just remember how the tax reform legislation was diluted or how social security reform was stopped. The charter must be based on simple, self-evident truths: entrepreneurship, an open economy and know-how are some of these. They must be explained to the public; the ruling party must actively back them and they must be part of an open dialogue with the unions. We must adapt the general Lisbon goals to Greek reality. For example, the goal for the actively employed to reach 70 percent of Greece’s population by 2010 is very difficult, since, nowadays, just over 50 percent of the population works. This means that we must sincerely promote part-time employment, create incentives for employment and mobility in the job market, build more daycare centers, etc. So, the charter must focus on competitiveness. We must continue to grow faster than our EU partners to achieve convergence. And we must, somehow, continue to grow even when all the temporary factors that promote growth no longer exist.