A solution for Olympic, now

The government will soon have to pay an amount equaling one-tenth of the first planned installment to teachers, simply because retrograde convictions have hampered a deal on Olympic Airlines, Greece’s troubled air-carrier. Hence the heavily indebted public funds will be burdened with an extra 5.5 million euros. Moreover, next to the fine of 10,512 euros a day imposed on Greece in May 2005, the state has been hit with a new punishment, a fine of 53,611 euros a day, for failing to comply. It makes one ponder why the government has exhausted its fiscal austerity on teachers’ demands when the daily cost of keeping the national airliner aloft will soon soar over 64,000 euros. The government has inherited a clinically dead company that has been kept alive only through great infusions of state subsidies. Despite PASOK’s legal acrobatics, it is common knowledge that Olympic Airlines cannot go on in its present shape. Regrettably, the previous, Socialist administration was very eclectic in using the combined weapon of reform and subsidy. PASOK governments threw money into the company without taking any steps to overhaul it, thus worsening the problem. So far, the government has been extremely laconic in proposing a solution. Meanwhile, its financial impact on taxpayers is growing. Legalistic tricks like those that have invited the EU fines will only delay reform and feed into public deficits. Sure, the crisis facing the Karamanlis administration is much bigger than it was back in 2002, leaving conservative policymakers less room for maneuver. Further delay will only make things harder for the government in the future.