Not afraid of supervision

The European Commission spring report on the economies of the 25 member states is to be released in March 2007. According to sources at the Economy Ministry, if Greece’s fiscal deficit is reported to be under 3 percent of GDP then there is good reason to expect that Greece will be freed from EU supervision by the end of next year. But if the deficit forecast is over 3 percent of GDP, supervision will continue. There is little doubt that an EU decision to end its supervision of Greece’s economy would be warmly welcomed by the conservative administration, which will naturally try to capitalize on it ahead of national elections. Not without good reason, of course, as the Europeans will effectively acknowledge that New Democracy inherited a mammoth 6.9 percent deficit in 2004 and still managed to rein it in within just a couple of years. For some incomprehensible reason, however, Finance Minister Giorgos Alogoskoufis does not seem too anxious about Greece coming out from under EU supervision. And that is incomprehensible because such development would first of all be a personal vindication. But in politics appearances can be deceiving. It seems that the minister would give up an ephemeral triumph for a more permanent recognition of his legacy. Far from aspiring to see an end to Greece’s supervision, he would rather welcome an EU red card and an extension of supervision until 2008. If past political experience is any guide, the above is not some crazy conspiracy theory. Everyone knows that should the EU bogey disappear, most ministers – particularly old-style conservatives – and the heads of the troubled public utilities will get their hands on the public purse. As for those who are worried about Greece’s image abroad, it should be said that Germany, Europe’s economic powerhouse, is also under supervision, as are France, Italy and Portugal.