ECONOMY

Will the adoption of the euro finally bring the economy out of its hibernation?

On the night the euro entered our lives in concrete form, on New Year’s Eve, the occasion was celebrated at the Bank of Greece with great fanfare. A few days later, the radiant smiles of the Prime Minister, the ministers and the bankers appear a little hollow, as the country has been cut in half by the «extreme» weather conditions, the Public Power Corporation cannot cover the increased demand for electricity and the «old, inefficient Greece» that Prime Minister Costas Simitis so colorfully invoked on the occasion of the sinking of the Express Samina ferry in September 2000, appears to be alive and well. The celebrations over the euro give the impression that the country has, miraculously, entered a higher stage of development, with a higher standard of living for all. However, as Economy and Finance Minister Nikos Christodoulakis said in his very first interview of the year, the difficulties are only just beginning, since we can now directly compare our incomes with those of our eurozone partners, and start an effort to bridge the awfully wide gap separating us from them. Christodoulakis is one of the few government officials with perfect knowledge of the state of the economy, and he knows that the real picture has little to do with the one the government has so carefully cultivated until recently. The minister’s big concern, for the sake of the country but also for his own political career, is to mobilize those forces that will help transform the economy, if they exist! The adoption of the euro is indelibly linked to the notion of competitiveness. Until now, nobody has seriously spent time educating the Greek people on the meaning of competitiveness, leaving them to dream nostalgically about the good old days of the omnipresent State and certain employment. Ever since the effort to converge with Europe began, timidly, in 1996, a kind of disorienting mythology, or propaganda, if you like, prevailed which failed to educate the people about the realities of the situation. The propaganda claimed that joining the eurozone would create a «strong Greece.» No one told the people about the need to adapt to today’s reality, which is globalization. This latter term is hated by the majority of Greeks, who cannot grasp that it is nothing more, or less, than a natural phenomenon, like a heat wave or a storm, that we have to adapt to and survive. If we survive, it we will become stronger and better. No one really prepared the citizens for the era of the euro and of the need for increased competitiveness. The people mainly responsible for it, the politicians, proved to be, with only a few exceptions, unequal to the task. The perception that the government is a tool for the adherents of the two big parties – PASOK and New Democracy – to satisfy their needs, is prevalent not only among the two parties’ rank and file, but also among the majority of their politicians. The few exceptions of some enlightened political leaders serve merely to confirm the rule. These few are forever in danger of being marginalized by their more cunning colleagues who go on as usual, promising everything under the sun. So, it is completely normal that the Greeks, who still see safe employment in the public sector with its (truncated) eight-hour day as the fulfillment of their ambitions, to see the euro as an opportunity for even better living, with the money provided, of course, by the foolish Europeans, who should be eternally indebted to Greece for having been the birthplace of Western civilization all those centuries ago. Is it a coincidence that, although the road to a single currency was clearly mapped in the early 1990s, Greece did not proceed with some limited structural changes until the end of that decade, and then only under EU pressure? Wasn’t it true that then National Economy and Finance Minister Yiannos Papantoniou – now the Defense Minister – was looked upon as a strange case by his own PASOK comrades only a few years ago, when he dared mention privatizations? After all, within the ruling Socialists, and more specifically, the hard-line Socialists opposed to Simitis and Papantoniou, it was very fashionable, until a few months ago, to invoke a presumably different, more socially sensitive economic policy. This has now been exposed for what it was, a trick for internal consumption. A few months ago, just before last October’s Cabinet reshuffle, the Bank of Greece, the supposed guardian of monetary and fiscal orthodoxy, also jumped on the «social sensitivity» bandwagon. It is true that the bank, nominally independent since 1998, was anything but, choosing to go along with the government’s policies and offer only mild, but not constructive, criticism. One can take the example of government delays in opening up to competition in crucial sectors of the economy and proceeding with the needed structural changes: the bank would offer only generalities and «understanding» about the delays. As a result, the government proceeded as it wished, unencumbered by criticism from the monetary authorities and ignoring such mild criticism as was offered. Government officials, many of whom do not have the fondest of feelings for Papantoniou, point out that the central bank’s «social sensitivity» and its lackadaisical attitude regarding structural changes is self-serving. Isn’t the Bank of Greece itself, with its 3,500 employees a bloated state body? The Bank of England, by comparison, employs 2,500. Few Greeks are aware that the country is nothing but a tiny region in the eurozone which, in order to survive, must produce and sell inexpensive, quality goods. This is a must if the country is to continue to receive enough money in order to be able to buy goods in return and for the population to maintain its level of consumption. The trade deficit shows clearly that we import the majority of goods we consume. It would be folly to think that we can finance our deficit with our national currency, which is what the euro has become. It is obvious that if the deficit keeps growing, we will not find anyone to lend to us, even in euros. The ability to produce inexpensive, but quality, goods, will not only affect our ability to consume. It will also affect employment, the most serious problem we are facing. «Banquets were one of the major arenas for social manipulation,» said Bendall, who is studying written tablets found at Pylos, some of which show who brought what to the affair. «They were used as both a way of showing off wealth.. . and, in some ways, creating reciprocal obligations.»