Harmful promises

The new PASOK president’s election campaign rhetoric is rife with costly proclamations. In the past few days, in fact, as the election campaign enters the final stretch and the opinion polls are not promising for the ruling party, George Papandreou’s promises have been coming thick and fast. These are pledges that will require more than the feeble resources of the Greek economy to fulfill. He is promising annual pension increases of 5 percent, cultivating hopes for wage increases far higher than the inflation rate, a reduction in taxation coefficients, an increase in tax-free ceilings, a 10-year «taxation lull» (one wonders what this means and how it can coincide with a reduction in taxes) and a number of other handouts to special groups, along with a boost in investments. Papandreou is sailing on a sea of promises while committing himself to fiscal discipline and stability, grandiloquently proclaiming he will not exhaust the economy’s tolerance limits. This all seems like hot air in the absence of any qualitative approach, or the slightest reference to the resources he will use to carry out these promises or the required revenue needed to back up such generous promises. This is especially the case at a time when everyone knows full well that Greece’s finances are in trouble, that the economy’s tolerance limits have already been exceeded and that it can no longer escape the cycle of fiscal crisis. The latest figures reveal these fiscal difficulties in the most categorical manner. Budget deficits being monitored by the Bank of Greece have skyrocketed, calling for emergency solutions right after the elections. The central bank’s data also indicate that interest expenditure increased considerably in 2003, despite low interest rates. If public finances were flourishing and the public debt receding, outlay on interest rates should have marked a decline. Since this did not happen, hidden debts only multiply and the country mortgages its future. Clearly, Papandreou cannot make promises in the manner of a reckless ruler whose only goal is to drag voters through the happy valley of his own imagination. Unfortunately, the reality is somewhat different to what he presents, a fact of which he is well aware. He has the information, he has been briefed on the situation and he knows that the next government will be faced with tremendous difficulties. And that is why his descent into the realm of promises and the cultivation of great expectations is so harmful for the country. He is creating an artificial image, deceiving the people and fostering desires that cannot be fulfilled without effort and sacrifices.