Fixing the economy

This week, the government is due to stage a counterattack of sorts on the economy. With the announcement of an incomes policy aiming to limit salary hikes to just above the level of inflation, the presentation of a stability program to Parliament and a series of measures to boost state revenues, the government will try to prove that it has the solutions to fix the economy, but also that it is bold enough to present them and thus respond to the accusations lodged by the opposition. But, however positive these initiatives may be, they are not the only ones that need to be taken at this time. The Greek economy needs a shot in the arm to stimulate development which, as Prime Minister Costas Karamanlis has said, must be administered through broader structural change and fundamental measures to boost economic activity and productivity. Such changes will not always be popular and do not fit in with a trend of gently implemented reforms, but the government itself has stressed that they are necessary. The crucial question now is when these measures should be implemented – a question that can be answered within the context of a political climate in which Karamanlis is almost totally dominant. Within his party, Karamanlis maintains utter control as there appears to be no doubt whatsoever about his character or his policies. And his influence is correspondingly strong on the broader political stage because PASOK does not have the capacity to challenge his leadership (either because the memory of its long-lived stint in power is still fresh or because PASOK chief George Papandreou is struggling for confirmation from his own party). So the current climate is exceptionally favorable for the prime minister – indeed, it is doubtful that there could ever be a better time to push through such bold changes. So, if these measures, deemed so vital by the government itself, are not taken now, when will they be ventured? As time goes by, the deterioration will only continue, the opposition will invariably recover and the next elections will suddenly loom – in other words, the political climate for the government will be far less favorable. If the country needs change, then it needs it now. Tomorrow the climate will be far less favorable, the essential interventions far more difficult to carry out, and irresolution invariably greater. Inactivity today will merely cause problems in the future.

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