Ministers in crisis of conscience - The Best from Greece

GOVERNMENT ministers admitted on Monday that the austerity policies pursued in the course of the past two years have not only failed to meet their budgetary targets but have also had detrimental effects to Greek economy.

 

“The government has been wide off the mark in all its macroeconomic forecasts,” Alternate Finance Minister Filippos Sachinidis told parliament in reply to a question by Radical Left Coalition (Syriza) leader Alexis Tsipras.

 

“Responsible for this failure are all those who have ventured to make credible budget forecasts in the volatile economic environment that has prevailed in the last couple of years,” Sachinidis said, referring to his fellow ministers as well as the representatives from the IMF/EU troika, which authored the bailout programme and the austerity measures arising from it.

 

As regards the 2011 deficit projections, Sachinidis refrained from making any forecast about the divergence from the revised budgeted target of 9 percent of GDP, which is now moving closer to 10 percent (compared to 10.6 percent last year).

 

“It is very difficult to make definitive forecasts for 2011,” he said, without ruling out “a request for additional funds from our creditors to make the fiscal adjustment milder”.

 

Even more outspoken in his critique of Pasok’s two years in power was Development Minister Michalis Chrysochoidis, speaking at a late-night talk show on Skai TV.

 

Chrysochoidis said that the newly elected government of George Papandreou in 2009 had failed to take the right measures and borrow the right amount of funds from the markets on time before “binding the country to the [bailout] memorandum in May 2010”.

 

“We didn’t negotiate [our bailout] properly, and when we entered this arrangement we proved to be totally incompetent in the management and implementation of the obligations we have assumed,” Chrysochoidis said.

 

The intensely self-critical remarks of Greek government ministers come at a time when other over-indebted European countries, including Portugal, Ireland, Spain and Italy, are struggling with the same downward spiral of recession and austerity, while senior IMF officials admit that the EU-IMF creditors’ recipe is wrong.

 

“We are seeing European countries move from one bailout programme to another, one EU summit to another, without admission of failure and without allowing the possibility of growth and unable to restore confidence,” former IMF chief Dominique Strauss-Kahn told a business conference in Beijing on Monday, in his first public appearance since he resigned under pressure in May after a scandal involving a hotel maid.

 

“The EU has agreed to lend Greece, but with an added [profit] margin, because the Greeks had to be punished for their sins,” said Strauss Kahn.

 

“From a moral point of view, I have no comment,” he mused. “But from an economic point of view, this didn’t help at all.”