Revealing the fiscal deficits

Reading the revelations about the state of Greece’s finances, it is hard to believe one’s eyes. One wonders how it is possible that the government was able to conceal public expenditure, and it increases skepticism over future prognostications about the country’s public finances. In fact, the people of Greece are being misled by the State-conveyed impression of abundance, the ease with which the government spends money from the State coffers, and by the lack of serious political concern over a problem which may seem easy to tackle, but which is expected to demand fresh sacrifices from the people. Unfortunately, matters are worse than what has appeared in media reports. People who have more detailed knowledge of the country’s economy are deeply pessimistic about the repercussions of this problem, which has snowballed over the years. People in the know report an unbelievably lax situation, with no beginning or end, with complex, unchecked mechanisms that at some point in time will burst, sweeping everything in their path. The current fiscal troubles are the result of the failure of the political elite to define the exact contours of fiscal expenditure. Caught up in the myth of a «strong economy» – a myth it was building for years – the government failed to impose limits by establishing a mechanism for restoring fiscal order in the country. Under pressure by the necessity to balance the deficits of the previous year, the government was forced to find new ways to gloss up the bleak picture of the country’s finances. However, the government’s extensive spending on arms procurements and Olympic-related projects brought things to a head. Nothing can remain secret for much longer. The nature and intensity of the problems leave no room for further delay. The country’s political elite must acknowledge the crisis and prepare the people of Greece for a new round of austerity measures. If they do not own up to the crisis, the realization of the extent of the problem will come as a shock to citizens. The consequences of such a sudden realization would be dramatic, possibly fueling social unrest the likes of which the country has not witnessed in the post-1974 period. The government must brave the political cost of unveiling the problem and must shoulder the responsibility of confronting the country’s fiscal troubles before it is too late.