Signs of crisis

The narcissism of the prime minister and his ministers, and the demands of government propaganda have kept the administration’s financial executives from acknowledging the true state of the economy. Without exception, PASOK officials brush aside any suggestion of structural shortcomings or of their own managerial mistakes as ill-thought, biased criticism – if they do not debunk it altogether as a clear manifestation of anti-Socialist conspiracy. However, a growing number of signs, even from abroad, convey the message that foreign officials – who have no reason to discredit PASOK – do not share the government’s optimism in the prospects of the Greek economy, nor the administration’s ostensible economic record. Regardless of the official reasoning behind its decision, the announcement yesterday by Deutche Bank AG of plans to sell its stake of more than 9 percent in EFG Eurobank Ergasias and withdraw from the Greek market cannot be seen independently of the decline in investor confidence in our domestic market. An institutional investor never leaves a profitable market. The grim picture is outlined in a report by the Economist Corporate Network which refers to Greece as an example to be avoided by future EU members from Central and Eastern Europe. The British report mentioned that «Greece has been set up as a model of everything that can go wrong after EU accession.» Even though the report avoids any reference to the global economic slowdown during the 1980s, it demolishes the myth of high growth rates that has been built up by successive PASOK governments, noting that for an entire 15 years after Greece’s EEC entry in 1981, the average growth rate was below 1 percent. Greece fell from 69 percent of the EU average in GDP in 1981 down to 66 percent. In other words, instead of converging with the other EU members, as the prime minister has it, Greece actually drifted away from its EU peers. In truth, the high growth rate of recent years (a result of EU funds and Olympics-related projects) and concentration by the European Commission and the other EU bodies on the snags facing France and Germany, have lessened pressure on the Greek government. However, after the problems besetting Paris and Berlin have been resolved, the issue of coordinating national economic policies at EU level will gain new intensity. Unfortunately, being preoccupied with other, trivial issues, neither PASOK nor New Democracy have put these problems at the top of their agendas. The result is that Greece is left unprepared for the difficult times ahead.