Looking for a common language
For the past two-and-a-half years, three separate finance ministers have held negotiations with the same people in the troika?s team of inspectors, yet they have not formed a common code of understanding or even a similar vocabulary. The Finance Ministry recently presented the inspectors with a list of spending cuts amounting to 11.5 billion euros. The troika has rejected about 6 billion euros? worth. It is obvious that either there is a serious problem in communication — in which case we should be questioning the adequacy of the interlocutors — or the Greek side is well aware of what the country?s creditors want but continues to insist on alternative measures that the troika does not approve of.
In May 2010, Greece?s political parties, with the exception of the Communists, chose the path of exiting the crisis through an internal devaluation over a messy default via a return to the drachma. To be fair, internal devaluation has so far averted the complete collapse of the system and salvaged some of the pillars of the economy (mostly banks) that will form a foundation for its rebound. But, in no way does it mean limited reductions to public sector salaries and pensions or the exclusion from new measures of farmers or the police and the military. It also does not mean we can hang on to public sector jobs, which must be reduced by 150,000 by 2015. If our politicians wanted to avoid such measures, then they should have dealt with tax evasion more effectively.
Greece?s bailout program also includes other measures such as the privatization of state-owned enterprises. The three partners in the coalition government do not disagree on this point, but it is naive to believe that any investor would be interested in acquiring a company that does not have conducive labor terms, which means adopting all of the troika?s recommendations for the minimum wage in the private sector and other such measures.
Ignoring the root of the problem, which is about changing Greece?s labor model completely, the champions of Greece?s euro membership at all cost are at sea.
But politicians across the world — from the USA to Europe and all the way to the Far East — are pegging their future decisions and actions on the troika?s report on Greece. The government must figure out a way to speak the same language as the troika, because otherwise it is just playacting. What the troika wants, quite simply, is for Greece to implement the measures it said it would. If our politicians don?t like it, they shouldn?t have agreed in the first place.
