A slippery rescue

Financial Times
Editorial
October 4, 2011

It is not only the execution of Greece’s deficit reduction plan that has been slipping. So has the determination of its official creditors – the eurozone and the International Monetary Fund – to hold Athens to the commitments it has made.

The decision to “merge” the public accounts for 2011 with those for 2012, for the purpose of assessing Athens’ compliance with the conditions in the international rescue plan, is a fudge. Its only plausible function is to postpone the point at which the rescuers must decide on the consequences of Greece missing its targets. In the meantime, however, the eurozone desperately insists to be judged on what it says and not on what it does.

That is no way to behave in a crisis of voter and investor confidence that threatens to rend the fabric of European integration. Athens, at least, has long admitted that its greatest deficit is its credibility deficit. The eurozone should do the same – and go about mending its own tattered credibility. A start would be to say what is clear for everyone to see: that Athens has not got the job done that was assigned to it for 2011.

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