OPINION

‘Strong Greece’

As the most impressive way of backing up his argument of a «strong Greece,» Prime Minister Costas Simitis likes to talk about the spectacular increase in the country’s GDP in recent years which put Greece near the top of the list of European Union member states. In an apparently illogical manner, however, all manner of international financial organizations appear to be in ignorance of these facts and persist in displaying a lack of faith in the true state of the Greek economy. The decision by Moody’s, the international credit rating agency, not to upgrade Greece’s rating but to leave the EU’s «champion» of growth at the bottom of the list of 15 member states (with a grade of «3A»), in the company of central European states whose economies are naturally far poorer than ours, is one example of this. The truth, of course, is that for the time being, this low classification has negligible economic repercussions in practice since Greece’s membership in the eurozone enables it to borrow at interest rates of just 0.1 percent higher than those paid by Germany. However, this is of some political importance as it shows that international credit organizations are aware of the deeper structural weaknesses of our economy and are not satisfied with simply making a positive or negative macroeconomic forecast about the country’s credit rating. The fact, for example, that Italy and Belgium not only have lower growth rates than Greece, as well as larger public debt, but are among the highest rated, is indicative of the general lack of confidence in the picture of the Greek economy being projected by the government. Everyone has realized that the high GDP growth rates being presented are transitory, being chiefly due to the projects under way for the Olympic Games and the inflow of resources from the Second Community Support Framework. This is why the targets set by the government convince no one that measures have been taken to ensure similar progress after the Games. The plethora of structural weaknesses that the government is either unwilling or unable to rectify is the underlying reason for the negative stance taken by the foreign financial officials, particularly now that the policy of election campaign handouts threatens to wipe out even the last traces of confidence the government enjoyed – perhaps even among its more well-intentioned friends abroad.