Thursday, November 8, 2012

Only the Greeks can rebuild Greece

Financial Times
November 8, 2012

By voting through another four years’ worth of austerity measures, the Greek parliament has made a further step on the painful road that the eurozone promises leads to salvation. Yet to Greece’s citizens, every move seems to push the goal further into the distance, as each new revision of the austerity programme adds to the burden. Meanwhile, the country’s official creditors have little patience left.

The smallest coalition partner, Democratic Left, abstained from the package. Prime Minister Antonis Samaras still managed to pass it, but with a majority so threadbare that no one should feel confident that Greece will see the programme through. If support for it is tenuous inside parliament, it is non-existent in the streets. The slide into poverty of large parts of the population is stretching the social fabric to breaking point.

Yet Greece cannot avoid painful reforms: without the emergency loans from the eurozone and the International Monetary Fund, Athens would have had to cut its deficits even more savagely. The old system, where insiders lived off the fat of inefficiencies and debts imposed on outsiders, created an illusion of wealth always destined to end badly. But that makes the political handling of economic necessities all the more important.


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