Bigger challenges lie ahead

The New Year begins with familiar challenges for Greece and its people. Over the last 12 months, we have all grown familiar with the demands being made of us – from the government down to the last citizen. What has changed, though, is that the novelty has worn off: no longer can we turn to our lenders and European partners and plead for their understanding or more time. This, 2011, is the year that Greece will truly have to deliver. During 2010, the inability to press ahead with some reforms – the result of being unable to blow away the cobwebs of the past – was papered over by the drastic reining in of public spending. But now that pensions have been cut, civil servants’ salaries have been slashed and public investment projects limited, Greece does not have much left to trim. Instead, the government will have to tackle waste in the public sector, ensuring that the fewer euros being spent are not wasted. It will also have to find a way to boost its own revenues. Combating tax evasion will be one element of this effort. The other will be stimulating the economy, which is likely to prove the toughest challenge of all.