Thursday, August 2, 2012

Promises, promises: The reform programme is badly behind schedule

Economist
August 4, 2012

By late July Greece had completed only about 100 out of more than 300 reform benchmarks set by international lenders after their last visit to Athens in February. Two elections this year have not helped to speed things up. And despite two bail-outs since May 2010, left-of-centre politicians are still trying to dilute or delay a raft of fiscal and structural measures needed for Greece to stay in the euro zone and pull the economy out of a five-year slump.

Take, for example, Evangelos Venizelos, leader of the PanHellenic Socialist Movement (Pasok), a junior partner in the six-week-old coalition government led by Antonis Samaras, the conservative prime minister (pictured left, with José Manuel Barroso, president of the European Commission). When he was finance minister, Mr Venizelos pushed through parliament a €11.5 billion ($14.1 billion) package of spending cuts agreed upon in March as part of the second bail-out. They are to be implemented in 2013 and 2014 and the details are being worked out. Yet on July 29th Mr Venizelos, trying to rebuild Pasok’s popularity with Greek voters, defiantly suggested the reforms be spread out over four years, not two (he later backtracked).

Greece has legislated plenty of reforms but failed to implement many of them, say frustrated officials from the “troika” (the European Commission, the International Monetary Fund and the European Central Bank) responsible for overseeing the process. A former government adviser says: “A huge amount of work has been done, yet almost nothing has actually been completed to the satisfaction of our partners.”

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