4/10/11

The Dilemma of Europe about Greece

     
Τρίτη, 04 Οκτωβρίου 2011 11:36
It is perhaps because of its economic and political insignificance in the developments of the European experiment that historically Greece has drawn little attention on the ways it managed its national finances and politics wasting a pactole of EU funds and borrowing. That until the consequences of the world financial crisis of 2008 brought it on stage with blinding floodlights. The information about its course to destruction was available well before but in true intergovernmental spirit not taken seriously. After all what country with economic weight less than 3% of the EU GDP would do to the edifice the European elites have been building for three generations? Particularly as momentum for more Europe was gathering pace until then. And even in 2008 many in Greece and in other countries thought that this country might escape with little damage as its financial structures were well behind the miracles of modern financial engineering.

But when the floodlights were switched on the size of the challenge became clear. As part of the titanic conflict where leading governments of the Western world are trying desperately to introduce effective regulation for the modern global financial system that has gone amok, the latter decided the moment had come to use Greece as the first blackmailing case of sovereign default against this move. And they had been preparing the country for this role well before. Europe and the US looked closer and gradually realised the dire state they and this country were in.
Given its institutions and intergovernmental processes are designed for a different phase of its development, amid mostly severe and often unfair criticism but supported by the other side of the Atlantic to its credit the EU moved incredibly fast. At a bearable cost it has taken steps to keep events under control and slowly brought the global financial system to realise that there are limits to its speculative endeavors that systematically erode the world economy by attacking its biggest pillar. It is perhaps a bit late to stop another global recession but we already see signs of this system willing to carry some of the burden of putting the world economy back on track with an ordinary resolution of the Greek impasse.
It is also now becoming clearer that the case of keeping Greece inside the EMU umbrella was from the outset essentially a political decision and this is confirmed by European leaders almost daily. The economic case of a usual salvaging an already bankrupt country stood anyway to no reason.
Nevertheless as EU authorities with an eighteen months closer look got to know the details of the functioning of Greek society and its administration they now sense they face a very difficult dilemma. As fundamental overhaul of the country’s institutions is urgently required, the political forces and the administration in place or any political alternative are incapable to implement it. They see that these forces are the ones that have created the problem and are today totally discredited thus asking them to change it is asking them for a political suicide. They act as hindrance rather than a facilitator to important structural reforms but remain in power and the sole point of reference as there is no credible alternative. So the EU authorities, albeit Greece formally asking for assistance, have dropped any illusion of mending Greece under the current political body.
This is where matters became extremely delicate. So much depends at a European, even global level but more importantly for the ordinary Greek on the success of the processes to modernise the state. Public opinion in Greece but also in the other countries of Europe is strongly demanding for a non-political team to manage the processes. Although important EU Heads of States still appear to support the current Greek government their close advisors and respected observers send signals for that need. Restructuring has at this stage created the need to bring in foreign advisors with gradually enhanced powers to effect the changes. Unfortunately there are limits to where these advisors can reach before they fall prey to existing brutal populist movements and are seen as an occupying force. This is the real dilemma.
Under these circumstances and assuming it is not too late one wanders if perhaps a real option is for more determined force to be exerted by European leaders on the Greek political system to allow under democratic processes the formation of a non-political administration of known Greek personalities of recognised competence. The Endeavour is bound to be very difficult. It will fall prey to populism in the country crying total loss of national sovereignty. People invited to join this team will be taking a very high risk but could bring credibility and confidence for responsible and professional management of the affairs of the state free from the corrupt mesh of the current political establishment with its tentacles, things that the ordinary Greek is desperately asking for today. But this administration, working closely with the EU institutions and without undue political exposure of the supporting technical resources brought from abroad, could be the only credible and socially acceptable vehicle to effect the changes.

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