Our need for supervision

In a few months from now Greece will face a critical judgment. Brussels is due to decide in November whether the Greek economy should remain under a regime of fiscal supervision. If the European Commission and the Council of Ministers are convinced that the country’s public deficit is below 3 percent of its gross domestic product (GDP), Greece will be free of this regime. What this means, in practical terms, is that the government will no longer be obliged to provide a full report regarding its public finances to the Commission every six months, nor will it be obliged to send details about the progress of its public revenues and expenditure every quarter. The government will simply inform EU bodies about the course of its economy as all normal EU states do, assuming Greece can ever be regarded as normal. Of course it is a good thing that our budget deficit is shrinking but it is doubtful whether it is also desirable to end the EU’s regime of supervision. Ending this regime of supervision would effectively mean forfeiting one of the few factors that have put a rein on public spending and boosted the collection of state revenues. And this is the right logic to apply to Greece. After all, it is almost certain that none of the major works in Attica would have been completed by the summer of 2004 if the Olympic Games deadline had not existed. If our European partners are convinced that our budget deficit has shrunk and will remain under the 3 percent ceiling, the regime of supervision will be lifted and the Greek government will jubilate. But this would be wrong. Because if the EC concludes that Greece has only reduced its fiscal deficit temporarily and that it will rise above 3 percent next year, then they will keep the regime of supervision in place. Once again it is clear that Greeks can only perform under pressure.