Courage and hope

Back in October, Prime Minister George Papandreou made a huge strategic mistake. He either failed to understand what he was getting himself into or he thought that his international standing was enough to get him and the country through. History will show what he really knew at the time and what his advisers urged him to do. The fact is that Papandreou never really caught up with developments – and there is nothing that can be done about that now. Now he is at the next crossroads. This time, the goal is to keep Greece in the eurozone and to reshape the country. The financial figures are devastating and, even by the most optimistic forecasts, repaying our debt will be extremely hard. The EU and the IMF are willing to lend us money for 2010, but hesitate to make any commitment for the years to come – first because they also have domestic issues and, second, because they fear they may need an additional 450 billion euros for Spain or Portugal. Moreover, Greek politicians have made a very bad impression on them, so they think that even if Greece were to sign an EU-IMF deal, the risks are high. They see no social and political consensus down the road, nor any sign of professionalism or political will among the political elite. The biggest concern is speculation that some people see a solution in the refinancing or partial cancellation of debt. But that would make the markets turns their back on Greece. One must be naive to believe that such threats could scare the Germans or any others off. Trying to refinance debt without first trying to meet your obligations is ducking one’s responsibilities. The only way Papandreou can succeed is by telling people the truth about the state of finances, to adopt the new EU-IMF stabilization program and bring New Democracy face-to-face with its responsibilities by asking it first to vote on the deal and then form a new emergency coalition government for its implementation. Papandreou has a fresh mandate. He must move quickly before he is once again left behind by developments.

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