Fighting inertia
The latest stock market plunge and the parallel drop in mutual funds profits, coupled with the bad news over the banks’ poor first-quarter results, have dashed positive expectations for the current year. According to forecasts, the current year was to be a period of high growth boosted both by the launch of the euro currency and by the country’s going into the final straight for the 2004 Olympic Games. What is to be seen instead is a picture of stagnation and falling investment despite the fact that deposits’ interest rates give a negative yield relative to inflation. True, these negative developments are largely due to the global economic downturn and the uncertainty caused by the September 11 terrorist attacks. At a time when other developed states have begun to recover, Greece remains stagnant not only because of the fallout from global developments but also because of domestic economic initiative, or rather lack of it. The fact that our country had to overcome the burden of the stock market intrigues in 1999 and the subsequent collapse of the Athens bourse reinforces rather than changes this assessment. The government knew that a careful approach was needed in order to restore the tarnished credibility of investors and savers. It thus had an additional reason to accelerate structural changes – although it failed to do so. There is only one explanation for this omission, namely the fact that the country, less than two years after the 2000 elections, is already talking about the next ones. Rather than making a serious effort to achieve a genuine convergence with the EU, the Socialists have indulged in speculation about political alliances and polarizing tactics. Talk centers on what sort of government policy will increase the chances for re-election. The government has been trapped in such way that even Prime Minister Costas Simitis, who stood out in 1985 and 1996 for his courage in locating the economy’s weak points and proposing solutions in the belief that their urgency would be acknowledged by the electorate, has let himself be swept away by the party’s navel-gazing. The prime minister has to realize the government’s impasse, to track down the causes and take the necessary measures. Inertia will do nothing to prevent electoral defeat, but any initiatives for growth will both benefit the country and perhaps help reverse the climate.
