Happy medium

For Greece, 2005 is the year of truth. In 2004, despite the country’s worldwide exposure thanks to the success of the national soccer team in Portugal’s stadiums and the flawless organization of the Summer Olympic Games, Greece was finally forced to face up to its budget deficits. There was wide realization that the reassurances of the Simitis government over the country’s supposedly powerful economy were groundless. Worse, on top of its fiscal problems the economy’s competitiveness and productivity continued to lag badly. This yawning deficit can only be tackled by introducing structural reforms that other countries have already implemented. At the same time, we thought we could be spared the diktats of the global economy. Greece is called upon to implement these reforms as soon as possible. In fact, it’s already late. That is not just because the government is already in its second year in office but, most importantly, because the stabilization program – which Greece has pledged to implement – will not yield any results before next year unless the government has completed the requisite structural changes by year-end. Reform of the labor system is one of the top priorities. Our competitors (both in terms of exports as well as foreign direct investment) have already taken measures to ensure more flexibility in working hours. The more we drag our feet, the more costly we become vis-a-vis other economies. In raising the issue of flexible working hours and overtime pay, the government is only following an established global economic pattern. It is the right path to follow. As with social security reform, reform of the labor system must be addressed within 2005. It is a complex issue, with far-reaching economic and social repercussions, in which all stakeholders must put their best foot forward. The opposition should not use the question as an excuse to promote its own partisan agenda. Nor should the government seek to impose its own positions. Similarly, employers, employees and the unions should not try to extract the greatest short-term gains. All sides must keep in mind that the social security and labor systems are two of the main pillars of economic competitiveness and income distribution. Keeping these two goals in mind, we should remain sober and modest in trying to reach a happy medium.