Pragmatism
The grim state of the Greek economy means that the conservative government of Prime Minister Costas Karamanlis has no option but to follow the path of fiscal discipline. But the campaign for fiscal reform will need to extend beyond 2005, as the government will be unable to eliminate the mammoth deficit or expand the country’s productive base by the end of this year. In fact, a pragmatic approach is called for at the moment, rather than overoptimistic pledges of some quick economic upturn. Sober management of existing problems would at best enable the government to start with tidying up public finances. In time, this could also be a tonic for faltering productivity. It would be highly beneficial for the country if the government took some initial steps to shape up the economy. At the same time, politicians and the public alike should shed their pretenses about living in a «powerful country» with a strong say in international developments. One of the government’s first priorities should be reforming the public administration. Low efficiency and high costs have prevented this sector from fulfilling its function as a lever for growth. A radical restructuring of the bureaucracy is a national imperative. But much still has to be done before that is accomplished. Until then, the New Democracy government can only benefit by examining the huge public reform program which was implemented by the Social Democrats in Sweden. The government there managed to modernize the system while keeping the basic model intact and trimming public spending by 10 percent of Sweden’s gross domestic product. There is little reason why a similar effort could not be made here.
