Hoping against hope

Some 20 months have passed since May 2009, when then Prime Minister George Papandreou and Finance Minister Giorgos Papaconstantinou adopted the memorandum drafted by Greece?s international creditors, and today the country is sinking in debt — and its residents in penury — without any sign that things will turn around.

The appointment of Lucas Papademos as interim prime minister and Evangelos Venizelos as finance minister has done nothing to reverse the situation. The Greek system — politically and economically speaking — is operating on the delusion that it is fighting to save the country from bankruptcy when in fact it is already bankrupt. The reason it hasn?t frozen payments is because it continues to borrow money, chiefly to cover its responsibilities toward its creditors so the European banking system is not threatened.

The politicians who are running the country today pretend to have introduced business logic to the management of Greece?s fiscal affairs. They are sorely mistaken if they believe that they have fooled the average Greek citizen, because a business trying to hide its bankruptcy simply increases the cost and pain of the final downfall.

It would have been preferable if, in May 2010, Papandreou and Papaconstantinou, instead of linking the ?salvation? of Greece to satisfying its creditors, had negotiated a restructuring of the Greek debt, in the same way that any business would do if it owed such an enormous sum to a bank. They refused to act according to the prevailing logic in the real economy and ever since the country has been paying the price for the folly and ineptitude of the PASOK leadership.

Most importantly, PASOK?s leaders do not want to admit that the process they chose, for better or for worse, presupposes the annihilation of the existing system. They are trying to save the country?s ailing state-owned companies, the tax evaders of the middle class, the management of Greek credit institutions, public sector heads and the business players who are dependent on government handouts. This at a time when the situation dictates the eradication of the very same.

They are trying to avoid complete disaster, which by definition would lead to a new state of affairs. They want to remain within the European Union, yet they defy Germany, hoping that Berlin will come around and agree to issue a Eurobond, as well as a restructuring Greece?s debt without guarantees.

The holidays are upon us, so for now, at least, let us share their optimism.

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