Thick clouds have gathered over the global political scene – and this is not only because of the looming American military campaign against Iraq. Apart from the geopolitical impact of a US showdown in the volatile region of the Middle East, it is clear that a strike would have serious repercussions on the trade of oil, whose price largely determines the fate of sluggish European economies. Faced with this heavy political and economic climate, Prime Minister Costas Simitis and the government ministers who are steering Greece in this difficult period need to be extra cautious, because the country will find itself exposed to even greater perils. On one hand, they have to uphold a rather fragile fiscal balance and, by extension, maintain the country’s economic growth. On the other hand, they have to avert any potentially negative fallout from the handling of national issues. The next few months will see a European Union decision on Cyprus’s bid for EU membership. In the meantime, Nicosia and Athens will be faced with painful dilemmas as UN Secretary-General Kofi Annan will present a settlement proposal on the issue of the island’s division. The course of negotiations will, needless to say, determine the overall state of Greek-Turkish relations. The approaching municipal and local elections are always a crucial test for the competing political parties. In light of the climate which has developed in recent months, the electoral results are not expected to upset the existing political equilibrium. This gives the prime minister more room to tackle major issues than he had expected last spring. The dismantling of terrorism, no doubt, owes much to our democracy, but the issue should not have grabbed the headlines for so much time. The first phase has come to a close and the police authorities are about to open the next one. It is to be hoped that they do so in the same painstaking fashion. Aside from all this, many acute economic and social problems remain unresolved. Should the government succumb to domestic cross-pressures and political expediency, it would harm the country and itself. In the final analysis, it is in the interest of Simitis and his party to deal with problems in a radical fashion, rather than sweep them under the carpet.