While there is a recognition that it is important for Greek politicians to be seen by voters to be putting up a fight, there is a growing fear that all the political grandstanding could backfire, and plunge the country into bankruptcy.
Karen Maley, Business Spectator
The job of Greece’s prime minister, Lucas Papademos, is not a fun one. As a technocratic appointment, he has no political backing. Hence, passage of legislation requires the parties represented in the Greek parliament to agree with his proposals. Of course, if they were political winners, they’d probably fly through. But there is nothing palatable about the measures being imposed on Greece is exchange for ongoing financial assistance.
The current sticking point is enforcing cuts to wages — a strategy of internal devaluation to boost Greece’s competitiveness. Antonis Samaras, leader of the centre-right New Democracy party, has complained that the country’s creditors are ‘asking for more recession than the country can take’. If the leaders fail to agree, then there is a real prospect that further bailouts will be halted. That would almost certainly prompt a total Greek default by March.
The problem, as Business Spectator’s Karen Maley reports, is that Greece has consistently over-promised and under-delivered since it was first sucked into the current debt crisis. Greece has frequently failed to meet agreed deadlines, and targets for a variety of measures have slipped away. Even if the latest impasse is resolved, there will surely be another one soon enough. How long before the inevitable strikes, and Greece is rendered broke by its squabbling politicians?
