Sleeping dogs, pointless inquiries

The government has made yet another brilliant proposal, this time for a parliamentary inquiry into the falsification of Greece’s economic indicators. As if aiming to match this fine idea, the New Democracy party, which was in power until last October, wants the inquiry to start as far back as 1981, when PASOK broke the rightwing monopoly on power. Both parties are correct: Both PASOK and ND played a leading role in Greece’s fiscal catastrophe and the fall in productivity; both parties are equally at fault for trying to saddle each other with the blame. That’s why the government’s proposal triggered yet another bout of political conflict that is undermining the consensus necessary for the radical changes demanded by the economy. Because all parties – and not just those that governed – are responsible, the only parliamentary committee that would have any reason to exist would be one that examines all the parameters of Greece’s economic problems, analyzes the reason for the impasse and proposes reforms capable of putting the country on course for economic growth. Perhaps the most fruitful place to start the investigation would be 1952, when a former Bank of Greece governor, Professor Kyriakos Varvaresos, presented the government of Nikolaos Plastiras with his comprehensive «Report on the Economic Problem of Greece,» in which he analyzed the country’s potential and limitations. His proposals were too uncomfortable and his political support too little for the report to be adopted, so Varvaresos returned to the World Bank in the United States, where he died in 1957. Since then the world has changed, as has Greece’s potential. Where once it was condemned to poverty because of its lack of resources and low agricultural productivity, Greece became a member of NATO and the EU and enjoyed the aid of its allies and partners. It grew wealthy from mass tourism, European unification and the impacts of economic globalization. No one could predict these developments back in 1952. At that time, and for the next 50 years, the country’s most serious problem was monetary instability, which undermined every effort at development. This problem was solved in a flash in 2002 when Greece adopted the euro, the single European currency. In the past, as in the present, Greece labored under a heavy burden of debt. In fact, as a technocrat finance minister in Eleftherios Venizelos’s government, Varvaresos negotiated a deal with foreign bond holders, promising them 30 percent of the interest owed them in the year 1932-33 (as Professor K.P. Kostis writes in an exemplary edition of Varvaresos’s report by Savalas Publications in 2002). On another familiar issue, Varvaresos concluded that «with today’s public administration it is impossible not only to conduct long-term economic policies but also to take basic measures to deal with current economic difficulties.» Today he would be obliged to issue an even worse verdict. He added that the economic situation would improve only if the main political parties cooperated. Today, a parliamentary inquiry would have to examine what has happened in public administration since 1952: who overloaded it with surplus employees; who broke the back of its hierarchy; who abandoned it to lethargy and corruption. It would have to examine where the untold billions of euros that flowed into the country in the last 30 years have gone, how taxes and social security contributions are spent, why every effort to simplify laws and spur economic development is defeated, why our education system cannot get out of its unproductive rut. A unified and sincere effort to catalog and analyze the problems in our economic and political life would serve as a springboard for the country’s rehabilitation and economic development. Anything else means just more lost years.

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