Assessing the New Greek Government: A Month Later
It has been a month since the June 17 election and the subsequent formation of a New Democracy-led coalition government. Where do things stand in Greece?
First, the sense of relief that came on the night of June 17 – as the country recognized that left-wing SYRIZA would end up in second rather than first place – has proven somewhat durable. The country is far from normalcy, of course, and there is a lot to be done. But the near panic that permeated the Greek public at the fear of what a SYRIZA government might do to the country has subsided. In and of itself, this is a good thing.
Second, there has been a marked change in tone. For much of the campaign season, the emphasis had shifted from what Greece can do for itself to what Europe can do for it; as I put it before, “Greece’s new motto is: ask not what you can do for your country; ask what Europe can do for you.” This has now changed. Instead, we now hear about how much Greece has not done, how few of the provisions of the memorandum it has implemented. This is, again, a very good development.
Third, we appreciate a lot better just how much the elections put on hold. There is an intense discussion about the measures that the new government has to take; but these numbers, (€11.9 billion in cuts through 2016) were part of the new bailout agreement and were known since, at least, March 2012. Yet we are just now getting to talk about them. Sad as it is, this fact underscores how much of a wasted opportunity the election season truly was. In three months and two elections we managed to avoid talking about the most important fiscal challenge that the country faced. Pity.
Fourth, the new government is picking the right battles. Instead of focusing on what to renegotiate, it understands that it first needs to restore some credibility. Credibility means a commitment to reforms and it means convincing its partners in Europe and the IMF that it is serious about change. Privatizations and the reform of the public sector are indeed urgent priorities and the government is right to put them front and center in its new agenda.
Fifth, we will know very soon what this government is made of. Gearing up for a fight with the power company’s union will tell us a great deal about the government’s stomach and appetite for change. So far, the government has indeed shown a willingness to fight; but it has also said publically that it will not fire people from the public sector, a non-serious starting point for reforming the state. Therefore, the signals so far are mixed. But they will be unmixed shortly. And that is good news since we will then know whether this government is for real or not
First, the sense of relief that came on the night of June 17 – as the country recognized that left-wing SYRIZA would end up in second rather than first place – has proven somewhat durable. The country is far from normalcy, of course, and there is a lot to be done. But the near panic that permeated the Greek public at the fear of what a SYRIZA government might do to the country has subsided. In and of itself, this is a good thing.
Second, there has been a marked change in tone. For much of the campaign season, the emphasis had shifted from what Greece can do for itself to what Europe can do for it; as I put it before, “Greece’s new motto is: ask not what you can do for your country; ask what Europe can do for you.” This has now changed. Instead, we now hear about how much Greece has not done, how few of the provisions of the memorandum it has implemented. This is, again, a very good development.
Third, we appreciate a lot better just how much the elections put on hold. There is an intense discussion about the measures that the new government has to take; but these numbers, (€11.9 billion in cuts through 2016) were part of the new bailout agreement and were known since, at least, March 2012. Yet we are just now getting to talk about them. Sad as it is, this fact underscores how much of a wasted opportunity the election season truly was. In three months and two elections we managed to avoid talking about the most important fiscal challenge that the country faced. Pity.
Fourth, the new government is picking the right battles. Instead of focusing on what to renegotiate, it understands that it first needs to restore some credibility. Credibility means a commitment to reforms and it means convincing its partners in Europe and the IMF that it is serious about change. Privatizations and the reform of the public sector are indeed urgent priorities and the government is right to put them front and center in its new agenda.
Fifth, we will know very soon what this government is made of. Gearing up for a fight with the power company’s union will tell us a great deal about the government’s stomach and appetite for change. So far, the government has indeed shown a willingness to fight; but it has also said publically that it will not fire people from the public sector, a non-serious starting point for reforming the state. Therefore, the signals so far are mixed. But they will be unmixed shortly. And that is good news since we will then know whether this government is for real or not
