Yiannis Papathanasiou, Greece’s economy and finance minister in the fateful final months of the government led by Costas Karamanlis, has published a new book, reigniting the debate over who should be blamed for Greece’s fiscal collapse in 2009-10. In his book, titled “8 Months” (the length of his term at the Finance Ministry), Papathanasiou revisits arguments he has made before, and throws in a couple of new ones, in a bid to shift the responsibility for the crisis to the government of George Papandreou.
The book was launched on Wednesday in Athens, with the participation of former New Democracy minister Nikos Dendias, former Bank of Greece governor George Provopoulos and the executive editor of Kathimerini, Alexis Papachelas, and in the presence of Karamanlis. In his speech at the launch, the author said the aim of the book was to “respond to the accusations and lies that, in the absence of counterarguments, have been accepted by society.” He claimed that the Karamanlis government in 2009, “for the first time in the post-junta period in an election year, took contractionary measures” and sought broader consensus, at a time when “the rest of the political parties and the majority of the media were calling on us to spend more and to explain supposed scandals.”
Dendias expressed certainty that had Karamanlis’s call in March 2009 for a united front against the mounting fiscal difficulties been heeded, the crisis could have been avoided. Provopoulos spoke of the wide-ranging “cultural, institutional, political and social” causes of the crisis to make the point that Papathanasiou could not have been expected to right the ship during his short term in office. However, he added, he could be faulted “for not adopting bolder and more drastic measures.” Papachelas, for his part, praised the author for writing which, he said, will be “will be very useful to the historians of the future.” He also called upon the political establishment to stop promoting conspiracy theories and unfairly demonizing certain people in order to explain the country’s bankruptcy. “If we don’t realize why we got here we will again stare into the abyss in a couple of years,” he warned.
According to “8 Months,” the 2009 borrowing spree (66 billion euros in total) was undertaken in an effort to build a buffer of cash reserves for the difficult days ahead. That buffer, of about 8 billion euros, Papathanasiou claims, was squandered by PASOK in benefit spending. He also claims that Giorgos Papaconstantinou, his successor at the ministry, refused to enact the measures that the European Commission was demanding before the election in order to curb the deficit, even though he knew this would lead to Greece being placed under the excessive deficit procedure. The implication is that Papaconstantinou desired the external supervision – even in its extreme form, the bailout regime – in order to escape from PASOK’s pre-election promises.
Papathanasiou, in his book, calls the deficit level of 12.7 percent of gross domestic product, at which the PASOK government arrived for 2009 before it was revised upward by the EU’s official statistics agency Eurostat and then Greece’s ELSTAT, a politically “pre-determined” figure. He claims that 10 billion euros was added by the incoming PASOK government to inflate the 2009 figure and put the blame on ND. On the revenue side, he claims that the new government “lost all control of revenue collection,” with the shortfall compared to 2008 exceeding 2 billion euros, when in the nine months to October it had been only been off by 1.1 billion euros. He also claims that the figure his government gave for the 2009 deficit just before it fell from power – 6 percent of GDP – was a “prediction,” not a statistical fact.
The official figure for the 2009 deficit is 15.1 percent of GDP. The 6 percent “prediction” was made on October 2, 2009, two days before the election. Papathanasiou is among those (including in an article in Kathimerini in September 2016) who have lent support to the legal proceedings against Andreas Georgiou, head of ELSTAT between 2010 and 2015, for artificially inflating the deficit and not defending the national interest.