ECONOMY

Will a change in leadership give a boost to the economy?

Domestic political developments and the expected change of leadership in the ruling Panhellenic Socialist movement (PASOK) may lead PASOK officials to open the debate about a new economic policy in the post-Olympics era. The needs of the election battle, the same analysts say, will oblige PASOK politicians to concentrate not merely on defending past policies but on stressing the inability of opposition New Democracy to articulate its own economic program. According to this analysis, the government of Prime Minister Costas Simitis, focused on defending its record, has been unable to focus on the challenges ahead. They believe that the political changes, hinted at by Simitis himself last week during the final debate on the budget, will allow a debate on the post-Olympics challenges and the solutions to Greece’s persistent structural problems. The technocrats favoring changes within PASOK are planning the election battle with the economy at its center, but from a novel perspective. They are confident they will convince the majority of the voters of their efficiency and ability to tackle all the economic and national problems, big and small. Last Monday, Simitis listed his government’s main achievements, from the high growth rate to tax cuts to the degree computers have been introduced into schools. In each turn, he focused on New Democracy’s lack of alternative positions. A qualitative difference between the two parties is their organizational structure, with PASOK depending on an extensive network of middle-ranking officials which will carry the weight of a decentralized election campaign. On the other hand, even New Democracy members say their party is «top-heavy» and lacks these middle-ranking officials. The markets have yet to make a complete assessment of political developments. Bankers, stock market players and others are watching developments at a distance but agree the period up to the elections will be an interesting one. The consensus is that the next elections will help jolt the economy out of its current limbo. this belief is more prevalent among public sector managers and bankers who, naturally, adopt the governing party’s professed optimism. On the other hand, other market players, self-described as modernizers who supported Simitis’s policies, believe this is no time for experiments. They say that what is needed is a continuation in policy and that any compromise born out of the ruling party’s survival instinct cannot provide lasting solutions or even a recipe for electoral victory. These people believe that Simitis’s «forced» retirement is one more sign of the haughtiness of those party officials who have benefitted from the long years of PASOK government and now consider their leader an impediment to a continuing rule. However, this is also the fault of Simitis’s «balancing» tactics and his inability to take a more radical stance. These «true Simitis believers» recognize that structural changes were half-hearted. The much-trumpeted Social Security reform was a dud. This year’s privatizations were limited to the sale of an 11 percent stake in National Bank to domestic and foreign institutional investors. The privatization of Public Gas Company (DEPA) is likely going to fail. Past successful part-privatizations were the result of a favorable conjunction in the stock market rather than the result of a successful policy. Even the brave decision to privatize the Postal Savings Bank was wrecked by the employees’ reaction and the quarrel between two nominal «modernizers,» Economy and Finance Minister Nikos Christodoulakis and Transport and Communication minister Christos Verelis, who put the interests of his constituency’s voters, a lot of them appointed to the bank, over those of the economy. Olympic airlines may have seen the light of day, but privatization prospects are very slim. And, of Course, the Simitis government failed to address everyday complaints about prices going up, the persistent red tape, health services, the inadequate education system. In his Parliament speech, Simitis said «Small issues will not be solved if we don’t solve the big issues – the Olympics, the conflict with Turkey, our position in Europe – because only then will we have the necessary funds to tackle the small problems.» how many of his ministers, however, are willing to defend this line to the voters?