The challenges ahead for Samaras
Can Prime Minister Antonis Samaras save Greece by ensuring its place in the eurozone without causing a social explosion? So far his style of governance has come as something of a pleasant surprise to those disappointed by his two years of counterproductive opposition.
Samaras has shown that he is in touch with reality and that he has determination. He has chosen as his closest economic aides people who he would not have been associated with two years ago. He is cautious in gauging the mood of the country?s partners. And, most importantly, he appears prepared to take on the risk of strict fiscal adjustment rather than wasting time on half-measures and compromises.
Will his strategy work? It depends on various factors, many of which are out of his hands.
What he can do is stop political appointments across the breadth of the civil service. He can also be wary of any scandal, big or small, coming to the fore and threatening to blow the entire effort out of the water.
The prime minister also has two other big battles on his hands. The first is with the prices of commodities in Greece, which even troika inspectors have said are too high and are putting an additional burden on households. This is a battle against strong interest groups, some of which are affiliated with New Democracy, but it can also bring real results. The second battle is to revive liquidity. Checks are bouncing all over Greece, countless businesses are unable to pay their workers? salaries, and everyone, throughout the economy, is deferring payments. The recapitalization of the country?s banks, the settlement of a part of the state?s debts to businesses and the promotion of big infrastructure projects can go some way toward restoring liquidity. If these measures are not in place by fall, however, the consequences will be devastating.
The other challenge for Samaras is to maintain the fragile balance of the coalition government. Samaras, PASOK?s Evangelos Venizelos and Fotis Kouvelis of Democratic Left know that if they stumble they will take the country down with them. Keeping the government on a steady path is a very difficult task, however, especially considering the pressure it will come under as of September.
The final and possibly biggest and most unreliable factor the prime minister needs to consider is Germany. If Berlin decides to write Greece off, then there is nothing Samaras will be able to do. This is why the two sides need to make a clear deal now: This is what Greece will do, this is how much it will get, and after that, no more talk about its future in the euro.
