A weak link

For years the government has turned a deaf ear to warnings about the economy. Prime Minister Costas Simitis himself has always taken comfort in illusions, believing that the economy is his most important card. However, after Greece achieved eurozone membership, citizens have returned to everyday reality – which was made even grimmer with the loss of their savings in the stock market crash. To be sure, the global economy is experiencing a slowdown, but still the government has opted to take the easy way out. Pressure from the forthcoming elections has led officials to gloss over the economic situation. Efforts to put a good spin on the situation have fallen on deaf ears, as the people have first-hand experience of the problems. The economic strain has begun to affect the middle strata. More and more households are finding it hard to make ends meet. Incomes remain stagnant, and in some cases they are actually falling. Things have also worsened on the fiscal side. State officials have exhausted all scope for creative accounting. Cooking the books may have once given an impression of prosperity, but everything has its limits. The huge drop in exports reflects the faltering competitiveness of Greek products. The influx of funds from the Third Community Support Framework (CSFIII) helps maintain a relatively high growth rate, but this windfall has not been used to stimulate broader competitiveness. The government is caught up in a reactionary mentality and beholden to entangled interests, which is wasteful and concentrates wealth in the hands of the few. The opportunity for growth in many sectors has turned into an easy way for cronies to get rich. This is why, according to EU forecasts, despite CSFIII, Greece will not escape from the bottom of the EU’s prosperity indicators.