The Reality of Greece's 'Reforms'

by Takis Michas

Wall Street Journal
September 20, 2011

Sometimes it is self-evident truths that cause the strongest reactions.

That was exactly what happened recently with statements attributed to Philipp Rösler, Germany's vice chancellor and economy minister. "To stabilize the euro in the short term, there can't be any taboos," Mr. Rösler said. "That ultimately includes Greece's orderly insolvency, if the necessary instruments are available."

For the Greek political class, the statement was a stab in the back. A statement by a leading German politician that a Greek default was unavoidable appeared to undermine the self-styled "Herculean" efforts of the Greek government to implement the measures envisaged in the bailout plan.

But others entertain strong doubts about the willingness and ability of the Greek political class to implement the structural measures that will improve the performance of the Greek economy. "The present government has done absolutely nothing during the last 12 months to speed up privatizations, reduce the public sector or open up closed professions," Athanasios Papandropoulos, a leading economic analyst, told me recently in an interview. "In these 12 months it has not fired even one civil servant. The only thing it is doing is trying to tax the private sector out of existence. Why should we believe that they will do something different now?"

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