As 200,000 people, led by a movement across Greece calling itself ‘The Outraged’, surround the parliament in Athens chanting, “Thieves, thieves, thieves”, here are ten proposals from a political scientist’s point of view for the Greek government, but also its European partners.
Here are the hard facts about the ongoing crisis in Greece. Fact one: After over a year of trial and error, Greece’s bailout of 110 billion euros has not worked since the tough austerity measures that were imposed upon Greeks have failed to significantly eliminate deficits; instead, budgets remain out of balance and spreads have continued to blow out causing a surge in borrowing costs.
Fact two: A new rescue package is now being prepared that would offer Greece an additional loan of over several billion euros. As the Institute of International Finance has stated, and almost anybody else seems to agree, this will buy Greece some time but offer little realistic hope of recovery.
Fact three: As with the first bailout package, the new one is given to Greece on condition of yet another round of fiscal austerity measures and tax increases. Further tightening is however certain to deepen the recession and make it even harder for the government to cut deficits; it also increases public discontent on the streets of Athens and other Greek cities. Fact four, deriving from the previous facts: Greece’s chance of reviving its economy, and paying off its debts, looks nil. The country has to keep paying full interest and principal on a debt burden that now approaches 148 percent of GDP, and is rising. Debt restructuring, therefore, looks like a very likely outcome.
Despite the grim outlook, as US president Lyndon Johnson would have said, it is a pity for a good crisis to go to waste. For, if the fiscal pain ahead will not be avoided, here sits a great opportunity for Greece’s leaders for the radical redesigning of the post-crisis state with a focus on deepening democracy, fighting corruption, and increasing productivity. What economists so far seem to have overlooked is that growth depends above all on political design, and the political ethos it produces, rather than on economic correctives. Here are, then, ten proposals from a political scientist’s point of view for the Greek government, but also its European partners.
opendemocracy
By Takis S Pappas
