ATHENS – Greeks had better get used to the idea of the international lenders coughing up the dough to keep the country from defaulting sticking around as officials of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) said a permanent office is going to be set up in Athens. And Germany’s Economy Minister and Finance Minister has insisted that the EU appoint a budget czar to oversee Greek finances, an idea repeatedly rejected by Greek officials, who may wind up having no say in the matter if they want the money pipeline to stay open. The Troika is lending Greece a first series of $152 billion in a first package and preparing a second of $172 billion to keep the country, which is broke, from defaulting and being kicked out of the Eurozone of countries using the euro as a currency.
Eurozone Working Group Thomas Wieser told Austria’s Format Magazine the Troika will keep an office in Athens even if Greece doesn’t like it. “A permanent presence of the troika on site to monitor the reforms will definitely be the case for several years,” Wieser was cited as saying. Wieser also told the Vienna-based magazine that he is “optimistic” that the Greek economy will grow again in 2013, “be it at a slow pace.” From the middle of the century, growth will “speed up,” he said according to the report.
Meanwhile, Roesler told the German business daily Handelsblatt on March 2 that he insists that the EU appoint a commissioner to oversee the implementation of reforms in debt-ridden states such as Greece. German Finance Minister Wolfgang Schaeuble earlier had recommended the same, and Eurozone chief Jean-Claude Juncker said he wants a kind of “reconstruction commissioner,” which many Greeks have taken to mean a bailout chief they don’t want, apart from Deputy Prime Minister Theodoros Pangalos, who said he doesn’t mind Greece giving up its sovereignty in return for money.
“My wish would be that the EU Commission appoint a reconstruction commissioner,” Roesler said, noting that official would be “primarily responsible for growth impulses and the implementation of reforms,” that the government has been reluctant to implement. “I can’t understand why the Greek side is opposed to this proposal,» Roesler added, a reference to the repeated rejection of what he said is imminent, despite objections from interim Prime Minister Lucas Papademos, who said that Greece alone bears the responsibility for the reforms it has pledged to foreign creditors. “I sometimes get the impression that the Greek people are fully aware of the sacrifices being asked of them, but that the elite in Greece don’t want to forego their privileges,” Roesler was quoted as saying, an apparent reference to the people who control the country and have largely escaped the sacrifices imposed on others, the workers, pensioners and the poor.
The proposal was also a slap at Finance Minister Evangelos Venizelos, who has doubled income and property taxes and taxed Greece’s poor, while tax evaders have largely escaped prosecution, despite a recent crackdown in which nearly 100 arrested, but not taken to court, although tax cheats are costing the country $60 billion in lost revenues.
The pay cuts, tax hikes, slashed pensions and coming layoffs of 150,000 workers the Troika said have created the crisis because they are unneeded have created a recession of near 21 percent unemployment and consumer spending has fallen off a cliff, leading to a drop in revenues of $43.5 million in January over the same month a year ago. Despite the continuing grim news, Papademos said after leaving meetings with EU leaders in Brussels he was optimistic and believes the second bailout, and a planned write down in $134 billion in debt will help the country recover in 18 months, although many analysts think it could take a decade.
“Growth is now Europe’s top priority. Decisions have been taken that will promote growth. This will help Greece exit from the crisis and will help with our fiscal consolidation,” Papademos said, adding that it is time to end the “vicious cycle” that the Greek economy finds itself in as a result of repeated austerity measures.
He identified several steps that could be taken to improve economic conditions in Greece: better use of structural funds, the completion of several highway projects, the recapitalization of Greek banks, more focus on renewable energy, exploration for fossil fuels, and improvements to tax collection as well as reform of the taxation system. “We need a stable, simple and socially just tax system,” Papademos said, adding that the new tax scheme would probably be ready in the middle of this year, repeating vows that have been repeatedly made and ignored by previous administrations.
Papademos, a former European Central Bank Vice-President, is overseeing a temporary hybrid government of PASOK Socialists from the former ruling administration and their bitter rival New Democracy conservatives until new elections in April that could bring little or no change as both parties supported the austerity measures and have agreed to continue them. Despite what EU officials said, Papademos said he won’t listen to ideas about a permanent European commissioner being stationed in Greece but that the presence of the EU Task Force would be strengthened.
(Sources: Kathimerini, AP, Bloomberg)