Subsidies are not the solution

Some of the more polemic members of the labor movement in Greece have grown accustomed to getting their way by using blackmail to pressure governments. Unfortunately, the previous administration of Costas Karamanlis chose to meet the demands of protesting farmers last year even though the country was in the grips of a serious financial crisis, repeating a vicious cycle of protest action, nonsensical subsidies and a season of low agricultural production. The government of Prime Minister George Papandreou today has absolutely no room to maneuver when it comes to the country’s finances and absolutely must not repeat the mistakes of its predecessors. Any show of yielding to the farmers’ demands will send the wrong message to international markets that are expecting Greece to firmly tighten its belt as well as harm the country’s credit rating. The government has a duty to convince the agricultural community that the solution to its deadlock is a restructuring of production and not more subsidies that the state coffers cannot afford.

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