The country’s difficult position

The first days of autumn are a good time to look back, to see where Greece stands in terms of the year that has passed and in relation to other countries. Unfortunately, this year, three landmark events – the opening of the annual Thessaloniki International Fair, the anniversary of 2001’s September 11 attacks and the release of the World Economic Forum’s Global Competitiveness Report for 2010-2011 – find Greece in a far worse position than anyone could have predicted nine years ago – or even last year. In just 12 months, we have tumbled from the carefree cloud of our well-being and been reduced to begging and accepting foreign supervision of our economy. We became an example to be avoided. Our debt crisis came close to contaminating other countries and undermining the EU’s common currency. Just a year ago, in Thessaloniki, George Papandreou boldly denounced then Prime Minister Costas Karamanlis’s determination to adopt a strict austerity program, declaring: «There is enough money.» Now, as prime minister, he is forced to concede that the only money that existed then – as today – was borrowed. Since then, we have had a change of government. The PASOK party has had to abandon its profligate ways and has passed laws adopting reforms no previous government had dared imagine. It has called on citizens, especially wage-earners and pensioners, to make great sacrifices. Unfortunately, budgetary data are not encouraging, indicating a revenue shortfall of 3.2 billion euros in the January-August period. In other words, the people’s sacrifices seem to be in vain, as the country still hurtles toward bankruptcy. If the reforms and spending cuts are not offset immediately by a tidying up of the public administration, by simplifying and enforcing the laws and by supporting entrepreneurship and jobs, all we will see is a continual decline in revenues and a complete impasse in our economy and society. The Global Competitiveness Report, which was made public on Thursday, offers valuable insight into the roots of our troubles. Much was written in recent days over Greece’s slide from 71st place to 83rd in the global ranking of 139 countries, which puts it in last place among the EU’s 27 member-states. But the most disturbing aspect is the comparison with the rankings of 2001, when the first such report was published in the wake of the September 11 attacks. At that time, we were in 36th place in a list of 75 countries. Then, Greece’s macroeconomic environment was in 32nd place, today it is 123rd. In short, we have drowned in debt. How did this happen? According to the report, out of 139 countries, Greece is ranked 128th with regard to the wastefulness of government spending, 129th in terms of the burden of government regulation and 133rd in terms of government debt. Wastefulness, useless bureaucracy and corruption are the most problematic factors for doing business in Greece, according to respondents cited by the report. The fact that we are ranked 125th in terms of an inefficient labor market would appear to be more the result of state mismanagement than the responsibility of workers, as more than half their wages go toward taxes and social security dues. Another cause of the Greek malaise is suggested by the fact that, whereas the country is ranked 17th in terms of higher education and training and 56th with regard to the quality of math and science education, the quality of its education system as a whole is ranked a mere 118th. Whatever good our education system has, then, is undermined by a lack of credibility and strategy. In this way, our children are, like the Trojans in C.P. Cavafy’s poem, doomed to make superhuman efforts only to be crushed in defeat. On the international scene, Greece’s image is defined by its current economic problems and the unrest of December 2008 and last May. It has improved somewhat by the fact that George Papandreou’s government – albeit it with a long delay – has taken serious steps toward fiscal consolidation. But we have not made up the lost ground, as is proven by the high cost of Greek debt and the reduced income from tourism. The only positive aspect of the past year is the fact that we have seen the magnitude of our problem. We have not worked out which direction we should follow but we did open our eyes just before the abyss. And we saw that the problem is not just economic but primarily political.

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