Grim Greece - The Best from Greece

When Greece’s technocrat government was formed, some in the media rushed to proclaim the Greek political crisis over. Not so, however, no more than the country’s economic crisis.

Austerity and fund-raising measures are being put in place but privately and publicly, questions are being raised about their effectiveness.

Already, the International Monetary Fund (IMF) has cut its growth forecasts for Greece, in spite of the austerity measures.

Earlier in December, IMF managing director Christine Lagarde, even as the Fund announced that the completion of the latest review had enabled the disbursement of funds for Greece to go ahead, said that Greece had substantial achievements to its credit, but "the programme is in a difficult phase".

This she described as "structural reforms proceeding slowly, the economy weak, and the external environment deteriorating. This has warranted a substantial downward revision to the medium-term outlook".

Separately, economists see Greece’s economy as shrinking by a possible more than six per cent this year and by three per cent in 2012.

Leading Greek daily Kathimerini reported that the troika – the European Commission, the IMF and the European Central Bank – would be asking for further austerity measures, of about two billion euro, if Athens wants its new 130 billion euro loan deal to go ahead.
 
Hard times
The impact on households is severe.

Ahead of the Festive Season holidays, a survey by Greece’s National Confederation for Commerce found that 25 per cent of Greeks had too little money to buy basic foodstuffs.

Ninety per cent had stopped spending on clothes and footwear, eighty per cent had stopped spending on leisure activities and 75 per cent found themselves unable to put aside money for savings.

Statistical agency Elstat, reported by local media, said that more than 400 000 households were without income because of unemployment and 60 000 had applied to be declared bankrupt, unable to keep up accounts payments.
 
Selling off 
Meanwhile, privatisation procedures have begun.

The current plan envisages sales of state assets to bring in 50 billion euro by 2015.

The fund in charge of the use of state-owned property has an initial three major packages. The first includes 29 airports, the second involves 12 ports – including those at Thessaloniki and Piraeus and the third involves state-owned land suitable for building developments.

Other items on the list, further down the line, include state stakes in the natural gas company, the national oil company, the football betting company, horse-racing betting company, among others.
 
Politics, politics 
Provisionally, the current administration headed by prime minister Lucas Papademos is meant to remain in place until fresh parliamentary elections around February 19 2012, but there have been hints that the technocrat government may remain in power longer, to make progress in negotiations with the troika and to try to get the country on to an even keel.

That does not mean, of course, that politics is on hold.

To say that a challenge is expected to former prime minister George Papandreou’s leadership of the socialist Pasok party is an understatement. The question of leadership elections was to be discussed at a high-level meeting of the party on December 21, while some senior members already have been positioning themselves for a bid.

One is Michalis Chrysochoidis, who has publicly attacked the Papandreou administration’s failure in office.

The complication in this expected socialist leadership race is that three of the people named as potential challengers – Chrysochoidis, Andrea Loverdos and Evangelos Venizelos, currently hold posts in the Papademos administration.

According to Kathimerini, there was speculation that a leadership challenge and a possible cabinet reshuffle were "inextricably linked".

The paper quoted government spokesperson Pantelis Kapsis as declining to be drawn into a debate about the likelihood of a reshuffle, but said that Greeks should expect "significant developments after the holidays".

Venizelos is seen as a strong contender in a socialist party leadership contest. Long a political rival of Papandreou, he was only narrowly defeated in his previous formal challenge for the leadership in November 2007.

Meanwhile, should the resignations go ahead, it would mean that three cabinet posts – development, health and finance, the last-mentioned being the portfolio that Venizelos retained in the current cabinet – would require replacements, just at a time that it seems that what Greece needs, at very least, is continuity and stability.