Wishful thinking will not do
The bankruptcy of investment banking giant Lehman Brothers (whose assets were three times Greece’s gross domestic product), one of the biggest failures in Wall Street history, has opened up a can of worms in the international economy. The fate of Lehman Bros has sent shock waves throughout the world’s stock markets. It goes without saying that the liquidation of the bank spells great danger for the Greek economy, notwithstanding past reassurances from Economy Minister Giorgos Alogoskoufis that the domestic economy has nothing to be afraid of because it is «shielded» against outside threats. In order to combat the consequences of the global credit crisis, Greek policymakers will have to display a fair amount of responsibility and risk awareness. Above all, there is a need for hard work and a clear set of measures aimed at absorbing the spillover effect of the crisis. Given the economic volatility on the global level, the last thing Greece needs is populist sound bites about «shielded economy» and financial experiments such as the recently tabled tax bill.
