Government faces challenges over pandemic and rising prices

Government faces challenges over pandemic and rising prices

Just past the midpoint of its four-year term, the government faces three significant challenges: keeping schools open, avoiding further lockdowns and keeping inflation at bay.

Not managing even one of the three challenges effectively risks the government’s standing with the voters who, so far, have given it their confidence if not wholehearted approval through a series of crises – the pandemic, the fires – but may not be so forgiving in case of a slip-up.

A government official told Kathimerini that keeping schools open is a crucial challenge because it affects the functioning of families and any emergency creates social anxiety. Hence the decision to allow pediatricians to vaccinate minors aged 12-17.

“We must make sure schools will not shut down,” an official said, adding that isolated cases should be resolved immediately, before the problem becomes widespread.

Prime Minister Kyriakos Mitsotakis has emphatically rejected the likelihood of further lockdowns, and not only because society will not tolerate them; there is almost no fiscal margin for the sort of generous subsidies that kept the economy from collapsing. If there is a further rise in Covid cases or if hospitals come under pressure from rising numbers of people requiring intubation, the government may resort to draconian measures against the unvaccinated, who are enough to provide a budding political movement with the impetus it needs.

The third challenge the government will face very soon is that of rising prices. It’s a global phenomenon connected to disruptions in supply chains. For those who believe that, in the end, a government’s reputation hinges on the economy, this is the greatest challenge.

The government has three strong cards: first, the measures Mitsotakis will announce this Saturday in his keynote speech at the Thessaloniki International Fair. The second is that the price crisis will not last long, a position espoused by Bank of Greece Governor Yannis Stournaras and shared by Finance Minister Christos Staikouras. Finally, there is the higher-than-expected GDP growth, 16.2% year-on-year in the second quarter.

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