Rolling back the State’s frontiers

The main reason behind the government’s decision to sell a 10 percent stake in the National Bank of Greece through a so-called «accelerated bookbuilding» procedure was, no doubt, the badly needed revenue to eliminate the current deficit. It is needless to point out that this is not the optimal way to take such significant, and indeed strategic, decisions. On the other hand, it would be an inexcusable act of pedantry and a grave political error to concentrate only on the procedural aspect of the issue and thus downgrade, or even ignore, the huge significance of the – positive – structural implications of the government decision. It is obvious to any subtle observer that the extent of the structural change renders the sale of a 10 percent share in Greece’s largest bank one of the most crucial decisions taken in the second tenure of the Socialist administration under Costas Simitis. The disengagement of the State from the National Bank of Greece is a step in the right direction; a step that demands a great deal of political courage. Such initiatives benefit the Greek economy and bring it closer to the needs of the extremely competitive contemporary environment. Regardless of the pretexts, motives or causes that prompted the move, the conservative opposition would be ungenerous not to recognize the beneficial effects stemming from the government’s decision. Nevertheless, we should point out that the financial gains for the state coffers would be far greater had the latest move been a part of a well-thought-out and comprehensive economic plan. This would also help the government to balance the budget. In addition, the government should use the revenue from bank sales to fund growth-oriented structural changes and to fill the budget’s black holes created by the vote-grabbing government measures announced ahead of parliamentary polls. This should become a lesson for the next moves of this kind that the government has set itself for the future. The government must learn to promote the modernization of the Greek economy while, at the same time, ensuring the highest possible economic benefits for the public sector.

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