A long, hard struggle

The presentation of the draft budget confirmed the government’s intention to undertake fiscal reform without resorting to extreme measures, gently and gradually, in order to achieve adjustment without provoking social reaction and upheaval. This approach is in keeping with the government’s pre-election pledges but also reflects a more widespread social temperance. Besides, it is well-known that the fictitiousness of the promises made by former premier Costas Simitis regarding a «powerful economy» not only apply to public finances, but also to the state of the poorer social groups, who are under protracted pressure and would be unable to withstand the «shock therapy» of extreme measures. However, the mildness of the draft budget should not mislead us regarding the extent and seriousness of the problem that has been festering in Greece since the early 1980s without ever having been decisively tackled. Indeed, it may be true that balanced budgets do not constitute a panacea and that public debt has often proved to be an effective instrument for growth; but in our country, it is well-known that loans have not been used for investments to boost our national product in the future but rather to fund a policy based on providing social benefits. Theoretically, even the latter could provoke a spurt in growth, albeit a minor one. Unfortunately, however, even this would not happen in Greece, as the monies distributed by the State have been spent on consumer goods, ensuring that the populace also becomes accustomed to consuming more than it produces. In this context, the rejuvenation of public finances requires an entire shift in mentality as the State must tackle the excessive demands of certain groups of citizens, alongside the bad habits of businessmen who depend on it. And this needs to happen at a time when there is a general boost in spending, something that is rather difficult to contain. One only has to look at audits of public finances to get a sense of the complexity of fiscal reform. When the conclusions are so gloomy, one realizes the difficulty of tackling them with soft budgets and modest adjustments. Difficult does not mean impossible. But it does mean that the problem needs to be seen in its full context and that its remedy be carried out on a long-term basis. Our political leadership needs to prepare its citizens for a lengthy and trying struggle in which responsibilities should be fairly doled out.