Editorial To Vima: Limited expectations

The current government propaganda is cultivating expectations and hopes of increased income and handouts to a host of social groups, now that the bailout memorandums are over, and we have supposedly regained our economic independence.

High-level government cadres, ministers, MPs, and appointed propagandists are making pledges right and left, to helpless pensioners and the indigent, now that the era of austerity has passed, and everyone will receive a dividend from the salvation of the economy, achieved by the “chosen” government of the people.

Even the vice president of the government, Yannis Dragasakis, hastened to proclaim that the pension cuts that were passed into law just a few months ago will not be implemented.

Should one seek to confirm that, one will come up against a wall of limitations and commitments that do not permit such largesse.

The fiscal space created by achieving high primary surpluses – which result from skinning all citizens, both the haves and have nots – is specific, and is described in detail in the medium-term programmme agreed to with creditors and approved by the Greek parliament.

If one reviews the medium-term programme, one will find that funds available for redistribution are limited, and are the result of specific measures and a policy of fiscal limitation. If those measures and policies are rescinded, then the fiscal space and the whole construct collapses.

As those who are aware of the obligations of the government explain, there is no way not to implement the commitments enshrined in the post-bailout programme. They explain that it is well nigh impossible not to implement pension cuts and the lowering of the tax-free threshold. The only potential prospect is a postponement of the measures, which presupposes strong growth and progress, which for the time being is nowhere to be seen.

Finance ministry officials who are responsible for drafting the budget repeatedly have noted that the additional fiscal space created from the sacrifices of the Greek people is between 700mn and 800mn euros for 2018, and the same sum for 2019.

In 2018, that sum will by all accounts be used to cover arrears in restoring the wage levels of uniformed officers, judicial functionaries and university professors, which has been ordered by judicial rulings.

For 2019, the finance ministry is oriented toward a reduction of the insurance contributions of workers and the self-employed, with the aim of stimulating job creation.

Hence, for the time being there is no provision for anything beyond the implementation of legislated cut-backs.
In addition, those in the know say that without the implementation of commitments, European Central Banks’ profits from Greek bonds cannot be returned to Athens. The return of these profits is directly linked to the meeting of commitments to creditors, which must first be confirmed by the post-bailout fiscal surveillance mechanism’s review of public finances.

One can reasonably ask, then, what is the purpose of cultivating expectations and false hopes. As is well known, lies and propaganda are quickly exposed.

In any event, citizens have limited expectations. They seek actions and policies that can confirm that the country has found its way toward progress and prosperity.

People have had their fill of grand rhetoric and unfulfilled promises, which lead to disrepute and ills, and nothing more.