Economy requires drastic measures

The European Commission’s spring report on the economies of the member states, due for release on Monday, will apparently forecast that Greece will bring the 2006 deficit under the targeted 3 percent threshold. The bad news is that the projected drop in the deficit is partly a result of one-off revenues. As a result, the European Union predicts that the deficit in next year’s budget will climb to 3.6 percent. This means that this year’s success in making the target should not make government officials too ebullient, since such an attitude could undermine performance in 2007. As the responsible commissioner said, Greece’s efforts are in the right direction but economy planners can by no means afford to relax. The government must make sure that there is no letup in tax collection and, notwithstanding that 2007 is election year, the conservatives must stick with their structural reform program. The Greek economy is beset by structural problems which are the reason why the national economy is currently under EU supervision. The oversized and counterproductive public sector is taking a hefty toll on the state economy. The government has an obligation to go beyond the dry figures demanded by the economic and monetary union (EMU). Instead, the government must promote drastic measures that will aim at the root of the problems. Success does not depend on meeting the 3 percent target. It’s an endless wager about the future of the country.