Speaking about the prospects for Greece on Greek TV, Christine Lagarde, IMF Chief, (aka Marie Antoinette) sounded rather too upbeat when she said the following:
Our analysis is that if the structural reforms are conducted and therefore if there is a proper transmission of the salary cost reduction into prices, no additional cost reduction or pension reduction will be needed.
If, however, the structural reforms were not to take place, if the closed professions were to maintain their privilege, if the multiple licenses, bureaucratic hurdles and impediments to growth were to stay, then we would face another situation where the fiscal deficit needs to be tackled and therefore more cuts would be needed.
Now of all these why has nothing at all happened three years in to the crisis and three years of direct troika involvement? And how far is any of it likely to be seriously undertaken by the present Samaras regime which has proved just as incompetent, just as self serving and just as corrupt as the previous ones? Corruption, in fact, we are told has even increased.
As to the lethal corruption engendering, growth prohibitive bureaucracy, it is common knowledge that the parties supporting the government, share the spoils on a 5,3,2 basis. That is positions are filled NOT by the best and brightest as you would expect under the siege conditions Greece is living in, but 5 for Samaras’ party, 3 for Venizelos PASOK party and 2 for Kouvellis so called Democratic Left party (which has proved neither democratic nor left.)
The current government is bending over backwards so that its clients of the public sector will not be touched. Neither are firings contemplated, nor, which is worse, is any real modernization or stream lining of public sector services even mentioned, lest its should upset all those party appointees who get rich on the kick backs this regime engenders.
And as to “salary cost reduction being properly transmitted to prices”… Well now, does she STILL not know that the factors reducing productivity and maintaining prices exorbitantly high have very little to do with the already slashed cost of labour? Does she not know that under the troika’s guidance the financial costs for businesses have gone up exponentially? The exorbitant levels of taxation on everything from fuel to milk have caused production and transportation costs to soar on the one hand, and shelf prices to rise on the other.
If she doesn’t, then she isn’t much good for the job now is she? If she does (as one would expect) then who is she trying to kid? Herself? The other members of the IMF? The Greeks? (But they are beyond kidding and totally insignificant anyway) Or is it just that she too is in on the scam. Nothing must budge, nothing must flutter till Angela Merkel gets re elected Chancellor!
Which is why not only she but also our own Minister of Finances are trying to make positive noises about how things will start going well AFTER The Frau has been safely elected.
When they do not, then we know the mantra, and the actual cause of course. It is all the fault of the Greek government for not having put serious reforms into effect. Which they can be relied upon not to do. But then doesn’t Christine know that too? It would come as quite a surprise if she didn’t.