From Manos to Christodoulakis

In early 1993, the conservative government of Constantine Mitsotakis, which was under heavy fire from all sides, embarked on an extended privatization program in an attempt to back its electoral goals. At that unfavorable political juncture, and also burdened by a 1-trillion-drachma fiscal strain, Mitsotakis and his national economy minister Stephanos Manos hammered out a privatization program that although disguised under the cloak of structural change obviously aimed at collecting funds in light of a demanding pre-election period and the necessary pledges and handouts. That effort proved fatal for the Mitsotakis administration. About 10 years later, Costas Simitis’s government, in a different environment, of course, and with a public that is more comfortable with the idea of privatizations, is making a similar attempt, driven by the same political objectives. A pressured Simitis and National Economy Minister Nikos Christodoulakis, now in the second half of the government’s term, are stepping up a broad privatization program which is again portrayed as a wave of structural reform, but which in essence aims at creating an ample fiscal reserve which can cover the announced tax cuts and the expectations for civil service pay hikes. The two attempts share a number of elements. The current program of privatizations, like its predecessor, is hasty, under intense political pressure, and aimed at collecting money rather than implementing structural change. After wasting precious political time, the government is turning a useful instrument of structural policy into a wealth-making tool in order to meet electoral needs and is obviously running the danger of being held ransom by its own decisions. The above inevitably gives ground for skepticism, as the privatization of the Mont Parnes casino highlighted, leading to political skirmishing and delays. Even worse, it prompts scandal-mongering, as private interests struggle for public property and react to excessive centralization of wealth and power. In other words, if privatization does not take place in a free and transparent context, it could well bring about the opposite results. Unless the government abandons this revenue-minded logic as a means for achieving a political comeback, it should not be surprised if the outcome is reminiscent of October 9, 1993.