Despite the Loan, Greek Bottom-up Changes Look Unavoidable
DJCHVR AFP BELGIUM-POLITICS-FINANCE-EU-BUDGET-SUMMIT
After a marathon meeting, earlier this morning at 2:30 hrs. the Eurogroup took the political decision to disburse to Greece €34 billion in three instalments, the first on December 13 and the last in March 2013. The EU and IMF also agreed to reduce interest rates and profits and repurchase Greek papers to reduce Greece’s debt by 20 percentage points of GDP for 2020.
This decision can be interpreted as a positive continuation of the status quo. The first instalment will be sufficient for the payments of pensions, salaries and partial payment of state debts towards private enterprises. Payments to private enterprises will serve only to partially pay accumulated debts and certainly will not be used for any kind of development.
The situation in the Eurozone is still unclear and ordinary politicians are not aware of the real intentions of the big players. The Eurogroup ministers have taken a wait-and-see policy for Greece until decisions are taken to address the real problems of the Eurozone: Spain, Italy and France.
Greece is under the continuous pressure of its European partners, and is about to exceed its social limits and enter the one-way street to bottom-up structural changes. The payment of the €34bn in three instalments will certainly not resolve the Greek problem and will not put the country in the orbit of development as not only is much more needed, but primarily because Greece has not made the necessary systemic changes which are prerequisites for any development.
Greece has entered into a transition phase and there are two basic characteristics of this totally new situation that even the Greeks themselves can't perceive its magnitude.
First is that the present government, after a long time and despite the widespread discontent, enjoys the confidence of the majority of Greeks and after two long years of effort, the respect of the international community. It is led by a progressive leader of the traditional right-wing party, Antonis Samaras and includes the moderate socialists under Evangelos Venizelos and a fraction of the Left under Fotis Kouvelis.
The strange thing is, and this defines the criticality of the situation, that for the first time in post war years, Greece has a real coalition government, which has the wide acceptance of the electorate, yet it has no means to perform its basic obligations. This has an immediate effect; that the state machine is deprived of the capacity to act “in the name of God,” as all governments were doing in the past.
Yet for Greece this is not enough. The country urgently needs fresh loans to finance its cash flow requirements (pensions, salaries, medicines, etc.), which Europe is granting just below the limits, producing more austerity and consequently only stagnation and misery so the Greeks will accept the need for structural changes and eventually become financially independent.
This is the second characteristic of this government, is that it's Greece's last chance to modernize by changing the minds of the Greeks and overthrowing peacefully, all taboos.
If this government fails, no other conventional government will be able to succeed and the next potentially capable scheme will emerge from the barricades.
The widespread fear that a government of this type will be communist has no grounds. Contrary to previous decades, today the world is missing a dynamic communist centre to financially and ideologically support such a venture. The fear is, and this is the worse case scenario, that the situation emerging from the barricades will have no precedent. Thus it may involve new elements such as the potential spillover effect it may have in various Southern European countries including Italy, Spain and maybe France.
Many things are now on the path to change in Greece and watching carefully, one can notice the trends. For the first time Greece has an original (not imitation) western-European coalition government with no exceptional, arbitrary powers. Indeed, this government as it was the case in the recent past the government, cannot intervene with the judiciary.
Until the previous government under George Papandreou, judges and prosecutors were informally yet substantially under the minister of justice and the prime minister. Today this is not the case any more. Today, unless there is a personal long-time relationship, founded personal trust (very rare), no politician dares any more to call any prosecutor and tell him what to do.
Times have changed for everybody and Greece seems to be in the process of big bottom-up structural changes. This government looks as if it is able to channel, though without influencing the changes much. What this government might be able to do though is to secure a smooth transition to the unknown minimizing the spillover effects.
In this exercise, a new generation of political leaders should emerge and all basics in the Greek society will change.
The size of the public sector will be minimized to the very necessary, which combined with the introduction of the e-governance concept, will be reduced to a maximum of 250,000 qualified people. Labour relations will be fully liberalized. Cartels and oligopolies now suffocating consumers in practically all fields will be abolished. Corruption in the public sector, presently systemic, horizontal and vertical will disappear.
Closed professions (over 1,500) will all be opened. Education will be democratized and free to all universities and all students. Useless institutions will be abolished. All in all the county will be liberated from its perceptions and the spirit will change.
You may say, “midnight summer dreams.” Let’s be realistic. Societies are like mammoths. Once they start moving they increase speed and then either you will have to lead or top follow or to get out of the way. In our case, the indications are, that something is moving in Greece, is clear.
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