State of emergency

Even those who embraced the mantra of a «strong economy» – so warmly cultivated and promoted by Costas Simitis – have been now forced by circumstances to think again. Even the most appetizing lie has a sell-by date. Public relations tricks cannot disguise reality for too long. The warning signs were out there. The European Commission and other international organizations had sounded the alarm – in a more or less discreet fashion. Economic planners can no longer find comfort in delusions. In December, the Greek State borrowed 1.2 billion euros and issued treasury bills to the value of 500 billion euros in order to meet current expenses. According to the 2003 budget, total borrowing requirements in 2003 should have been 27 billion euros but actually reached 33 billion euros. In the early days of January, the Greek government also signed a 10-year syndicated loan for 5 billion euros to meet current expenses. The bitter truth is that public finances are sliding back into the sorry state they were in from 1992-1994, when the country found itself on the brink of bankruptcy. The situation is disastrous. The responsible officials in the Simitis administration have exhausted all creative-accounting tricks. Extensive cooking of the books helped fabricate a picture of economic health and prosperity that is unsustainable in the long term. The truth will always out. The inflow of funds from the Third Community Support Framework (CSFIII) has sustained a relatively high growth rate, but such tonics will soon disappear. Worse, European Union funds are not used productively and therefore have no spillover effect at the level of economic growth. The lingering economic troubles have had a dire effect on a considerable section of society. It is well known that an increasing number of households are finding it hard to get by. Incomes remain stagnant, or are even declining, whereas people’s needs are growing. The pressure has spread to the middle-income groups and there is no light at the end of the tunnel. Nothing can be expected from the outgoing administration. The premier’s recent remarks proved that he is stubbornly trying to sustain the myth of a strong economy while it crumbles. On the other hand, it’s too late to change course, even if he wanted to. The government that will emerge from the March elections will inherit the problem. In the post-election period, a state of emergency must be declared for the economy. There is no other way to reverse the current lax climate. An economic upswing needs self-discipline, hard work and, most importantly, productive initiatives.

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