Squaring the circle
The endless discussions among Greece?s coalition partners and the failure to implement a concrete set of measures indicate that the government is treating the debt crisis as a mock exercise, not as a real problem. Barring the transfer (or, perhaps, the sale — the exact term has not yet been made clear) of ATEBank to Piraeus Bank, which has been discussed by the responsible parliamentary committee but still needs to be debated among the political leaders, little else has happened since June.
However, the commitments that the country has undertaken under the EU/IMF bailout agreement are very clear. So the public has had to watch a psychological drama as the parties involved in the power-sharing administration struggle to harmonize their ?red lines,? ?campaign pledges? and ?program statements? with Greece?s promises to its lenders. Their posturing smacks of political amateurism with a touch of provincialism.
Under intense pressure from the country?s lenders and European peers, the much-hyped renegotiation of the memorandum has been pushed back to the indefinite future. Prime Minister Antonis Samaras is the only politician to have acknowledged in public the new reality, saying that Greece must first meet its commitments before it can push for modifications or an extension to the fiscal adjustment program.
However, even Samaras?s pragmatic shift is based on the optimistic scenario that an extension — whose cost is estimated between 30 and 40 billion euros — is feasible at a time when there is speculation of a haircut on Greek bonds held by the European Central Bank and other EU states.
Moreover, the memorandum that was voted in Parliament a few months ago foresees the reduction of the public sector workforce by 150,000, which means firing some 25,000 employees. That, of course, does not go down well with the coalition parties.
The government?s economic policy advisers have suggested implementing the labor reserve plan. PASOK chief Evangelos Venizelos said that the scheme was tried by the previous administration but failed. Fotis Kouvelis of the Democratic Left rejected the idea altogether. Both socialist leaders have ruled out any sackings. The three leaders are trying to square the circle.
One of the most tragicomic moments was when Venizelos, briefing his party about the bailout deal that he negotiated with the troika, said that the program will fail and will intensify the recession.
We should be in for more surreal statements.
