Economy blues

The figures that set out the true state of the Greek economy have more or less been known to us for a long time. The bad news about the deficits and the extra burden imposed by the unchecked spending for Olympics-related projects was, in fact, old news even before the government’s audit of the Greek economy that unraveled the fabricated picture painted by the Socialists’ creative accounting tricks. Perhaps this is what prompted Bank of Greece governor Nicholas Garganas to issue a warning against the lack of urgency among the Greek public during the bank’s presentation of its interim report on monetary policy yesterday. The central bank governor was effectively voicing his concern over the fact that the population insists on turning a blind eye to the grim economic condition. To be sure, economic prospects are bleak. Public finances are in the red. Core inflation is on the rise, undermining competitiveness further at a time when Greece aimed to converge with the eurozone average. The labor unit cost is up compared to previous years. And the current account balance is heavily in deficit. Figures speak the truth. The situation laid out in the interim report is hardly new. Greece has lost ground in its struggle for stronger growth. And, as Garganas said, we lack a sense of urgency and let time go by as more and more load accumulates on our shoulders. Our current apathy only invites inflexible, emergency-based and painful measures in the near future. The governor yesterday reiterated the remedial action that must be taken – and underscored how urgent it is. A first step should be to step up fiscal adaptation on the basis of specific government measures. A second goal should be to contain inflationary pressures, which is even more difficult to do because of high oil prices. A third priority should be to increase productivity so as to bolster Greece’s competitiveness in foreign markets. All these elements, of course, presuppose a number of structural changes that cannot be carried out so long as we keep pretending that a change in course is not necessary. They presuppose reform of the social security system and daring fiscal measures. We must realize that we cannot spend more than what we produce. During the Eurogroup and Ecofin meetings today and tomorrow, National Economy and Finance Minister Giorgos Alogoskoufis is expected to brief our EU peers on the new measures currently being drafted by the Greek government. However, the conservatives now in power should first inform the Greek people and put an end to public apathy by providing its citizens with an industrious and responsible lead.